If the Price is Right ...
What a bank will look at when evaluating your home's value.
Pricing your home for sale can be a difficult task, even for a Realtor.
Sometimes you have a unique property that just doesn’t match up to anything else sold in your area. How do you determine if the price you set is right for you?
Well you’ve heard the phrase “build it and they will come," in real estate it is “price it right and they will come.”
I often show my sellers what they are up against for competition and try to have them objectively judge how they fit into that price category. It’s always an eye opener for sure!
We all love our homes, myself included, but sometimes we need to remove our emotions and be objective about where we stand when it comes to our homes true value.
Remember that in almost all sale scenarios your buyer will be getting a mortgage for their home purchase. That lender will be sending out a bank appraiser to determine if the value they are lending on matches what the purchase price is. Unfortunately in this climate, banking is tougher than it used to be so you need to be sure that when you settle on a sales price you can satisfy that bank appraisal. Here are some things that a bank will look for when evaluating your home:
- Like kind sales in the past 6 months! In this ever changing market don’t expect to see sales from 2005 on that report.
- Like sales from a specific geographic location.If you are buying an older home that needs some work on a Main Street don’t expect to see a comparable from another neighborhood with a cul-de-sac.
- Homes with similar square footage and age. This means if you have a 1950’s ranch don’t expect your home to be compared to a colonial built in 2010 down the street.
- Finished basements! Yes they will add value but only to a certain point. If your basement is finished nicer than your neighbors it will have the same added value. When you add finished space to the true living area that is when you see a value increase.
Remember the bank has to put their stamp of approval on this, so price it right the first time! Just like that famous TV show “the Price is Right” if you go too high you are out!