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So you’ve decided to sell your home. Many people assume that contacting
a real estate agent should be the first step. Think again. Every year,
people selling their homes make this common mistake only to find out too
late in the game that they have listed their home at a price that is either
too high or too low. Choosing the right agent to sell your home is obviously
an important decision, but first things first, it’s important to
know what your home is really worth. Not knowing the value of a home prior
to putting it on the market can cost a seller literally thousands of dollars,
and unfortunately, too many people don’t realize this until the
damage has already been done.
The reasons for wanting to find out what your home is worth prior to
listing your property on the market are numerous. Some real estate agents
are more familiar with market values than others. If the agent you are
working with lists your home at too high of a price, your property might
be on the market for a long time. For many sellers, time is something
that they can’t afford to lose. On the other hand, if you have an
agent that lists your home below market value, it may sell fast but will
it sell for what it’s worth? If you’re not in a rush to sell,
pricing a home below market value can cause you to throw away thousands
of dollars. An educated seller will ultimately save thousands of dollars
by doing a little homework.
You never want your real estate agent to have the sole decision when
it comes to the price you will be asking for your home. You want to make
sure that you play a crucial part in that decision. In order to bring
your input to the table, you’re going to need to know what your
home is worth. Thinking that’s easier said than done? Many sellers
are surprised to discover that finding out the market value of their home
is a lot easier than one may think.
Until recently, getting an idea of what your home was worth meant spending
$300 or more for a traditional home appraisal. The process could take
a week or more, and getting the results of the appraisal could take even
longer. Thanks to the Internet, that’s all changed. More and more
home sellers are turning to online home valuations, actually called AVM
reports (Automated Valuation Models), to get an idea of where their property
value stands. An AVM is a sophisticated technology report, the product
of an automated valuation analysis, and computer decisioning logic combined
to provide a logical calculated estimate of a probable selling price of
a residential property. These reports assume a subject property is in
average condition for the neighborhood with no substantial economic improvements
or deficiencies to any other typical home in the neighborhood. An AVM
pulls public records, MLS data, and other valuable trending information
and reports to help determine the value of a home without having a live
person physically appraise the property. By combining the selling prices
of comparable homes in the area, the AVM is able to determine an estimate
of a property’s fair market value.
Unlike conventional appraisals, home valuation reports allow you to get
an idea of what your home is worth instantly. Instead of spending $300
or more, now you can spend under $30 and get your valuation in less than
a minute. One such company, ElectronicAppraiser.com, will provide you
with a complete valuation report that includes comparable sales of what
other homes in your neighborhood have sold for. This tool can be extremely
useful when determining what price you should ask for your home when it
goes on the market.
By ordering one of these home valuation reports, you’ll be armed
with local knowledge that will help you when it’s time to list your
home for sale. With an AVM report you’ll have a great tool to assist
you and your real estate agent in determining a listing price that best
serves your needs.
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While the automated valuation process is considerably accurate, it is
important to remember that no system is without its flaws. If you live
in an extremely rural area, the system might not be able to pull enough
information to provide you with an AVM. The AVM also won’t take
certain aspects, such as excess wear, into consideration; nor will it
figure in a number of high-end upgrades. If your property is distressed,
you might want to take the amount of estimated repairs and deduct it from
the value you’re given in your home evaluation report. In situations
like this a home valuation report might not be an exact science; it is,
however, a good starting point when determining your asking price.
Since the sale of your home is probably one of the largest transactions
you’ll ever be involved in, making sure that you approach the task
in an informed, educated manner is essential. A home evaluation report
isn’t just an estimate of your home’s fair-market value; it’s
a critical and first step of the home-selling process.
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By Jeff Herman, Affiliate Manager of Electronic Appraiser
For an appraisal CLICK HERE
How NOT to sell your home.
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