The asking, or list, price of your home must reflect the current trends of the market where you live. Just because Aunt Martha and you shared blueprints does not mean your house is also worth $1 million dollars--hers might be on Fifth Avenue or in Brentwood and yours might be just outside of Paris (Texas, that is.) It’s sad, but true. Surely you have heard the phrase: “Location, Location, Location”. It truly does have an impact on the value of your property.
It is not a wise idea to merely come up with an amount to ask without having any knowledge of your market and what your home can realistically bring. Too many people overprice their home only to see it sit on the market for six to eight months with no prospects. It is the most common pitfall of unsuccessful for-sale-by-owners.
In my experience I have come across countless people that determine their asking price based on what they owe, what the closing costs will be and how much they want to make on the sale. These three things have absolutely nothing to do with the value of your home.
Recent sales of comparable homes, current trends in your area and the physical condition of your property determine the value of your home.
There are a few different ways of ascertaining the market value of your home.
Appraisals One way to have the value of your home determined by a professional is to have an appraisal done. A licensed or certified individual, an appraiser, can perform an appraisal.
There are different types of appraisals, each done for different reasons. For example, appraisals can be performed to determine replacement costs, income approach value and market value. Having separate appraisals on the same property, each for a different purpose, can result in three different values assigned to the one piece of property. The point made is that if you request an appraisal for replacement cost it may be well under (or above) what an appraisal for market value would be.
