Establishing your Home’s Value
As a For Sale by Owner, how are you establishing the sale price of your home? Are you using Zillow? Listening to Uncle Joe? What process are you using to determine the value your home?
Establishing the sales price of your home is especially important to getting your home sold. There are many FREE online tools and websites that offer “guestimates” on value, but many times they are not correct for “your” specific market. Your home cannot be randomly compared to other homes sold within a certain area. There are many factors that play into establishing home values that cannot be grouped together and averaged.
Realtors and appraisers use methodical processes and neighborhood specific data to come to a listing price valuation (real estate professional) or lending/Mortgage value (appraiser). Both Realtors and appraisers have access to up to date, active, pending, and closed data that can help them select comparable homes in the area and analyze the differences between them to come up with an accurate listing price.
In today’s market, buyers have full access to the homes for sale, and over pricing your home could lead to no or low number of showings, extended days on market, and continued holding costs. High Days on market can then produce offers that are “low-balled” since they see that you have been on the market for a while. Yes, days on market can negatively affect the value of the offers, Realtors know high days on market is an indication to come in low.
So how do you get a good listing price for your home as a For Sale by Owner? I would suggest you call a Realtor or Broker. Pay them to run a report for you or do a full Comparative Market Analysis or Broker Price Opinion (Realtors do not do “Appraisals”). This could run you as little as $100 to as much as $300, but it is worth it. You are saving about 3% by not having a listing agent, so pay a little to help make sure you have the right price point for your home in the market you are in.
Also, just because you recently updated your home, does not mean the full value of the improvements will be returned in actual home value, many upgrades you perform on a home increase the desirability, but not the value. Desirability is not a bad thing, it may differentiate you from the home down the street, which is also for sale. This will become very apparent if you sell to a buyer who is getting a mortgage, the mortgage companies’ appraiser (paid for by the buyer) is representing the bank, not you or even the buyer. Appraisals are sometimes waived if the buyer is a strong buyer (20% or more down) or the if the buyer is a cash buyer, there is no appraisal at all.
For Sale by Owner can be a formidable task and there are many more moving pieces than expected. It can be frustrating and exciting at the same time. You are trying to save YOUR hard-earned Homes Equity and that is GREAT, but do not hesitate to use a Proven Professional when needed to help or to take over the sale.
Be especially careful about hiring Family members or friends to sell your home, your home is one of your largest assets, go with a proven professional not a part time agent.
If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan, please e-mail us at email@example.com or call 248-294-7850.
Scott Fader and Gary Brincat
Mitten Realty Group, LLC
Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.