Are You Selling At Auction?
Understanding Home Value
Determining a competitive initial list price is extremely important when attempting to sell a home in today’s real estate market. A new listing at a competitive price is what generates showings. A property with a list price too high usually gets overlooked and can become stale. Even lowering the asking price will not give the listing near the attention it would have received had it been listed at that same price from the start.
It is very important for you as the seller to understand the differences between Assessed Value, Appraised Value and Market Value when determining the asking price for your property.
- The assessed value of a property is simply the value applied to the subject property by the local government to determine the annual amount of taxes that need paid. The assessed value is NOT an accurate tool for determining the market value of a property. In some areas the assessed value is based on a percentage of the market value. For example, if the market value of the home was $100,000 at the time of the assessment, and the local government assesses properties in that area at 80% of the market value, then the assessment on that property would be $80,000.
- Appraised value is determined by a certified appraiser’s unbiased opinion of value based on a physical inspection of the property. An appraiser looks at the physical features of the property such as the amount of land, the size, style and condition of the home, as well as current market conditions to determine his or her opinion of value. In residential real estate an appraisal is typically used by someone who needs an accurate value for purchasing, lending or legal purposes. For example, a bank will use an appraisal to justify giving a loan on a property being sold. Although an appraisal is the best determination of the true market value on the day the appraisal was completed, a Comparable Market Analysis (CMA) is needed to determine the best listing price, and to further evaluate any changes in present market conditions.
- The present value can be defined as the most probable price a property should sell for in an open and competitive market within a reasonable amount of time. Determining the present value is the best approach to establishing a good asking price. The best way to establish an effective marketing plan to sell your home is to have a Comparable Market Analysis (CMA) completed by an experienced real estate professional. For example, if in 6 months 5 similar homes in the same area or neighborhood sold in the range of $200,000 -$225,000, a 6th similar home will likely sell somewhere within that range, therefore determining its value today. Of course every home is unique. Some are older, some are newer. Some need work and some are perfect. All these things need to be considered when determining a good asking price, but looking at the comparable sales gives you a great place to start.
Horning Farm Agency is a member of 3 MLS systems, the Bright MLS system giving us access to thousands of detailed listings throughout the Mid-Atlantic, including parts of Delaware, Maryland, New Jersey, Pennsylvania, Virginia, Washington, D.C. and West Virginia.
Our realtors have the tools and skill set necessary to help you find the right asking price for your home. Call or email us today for a FREE CMA of your home!