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What Is Your Home Worth?

For sellers, coming up with the right asking price is critical to selling the home in a reasonable amount of time. And despite rumors to the contrary, the process is more involved than just waiting until your neighbor’s house sells and then tacking on an extra 10 percent.

In this kind of changing market, the experienced team of agents at Prudential Locations recommends going back to basic pricing fundamentals.

After all, the very definition of “market value” is what a buyer is willing to pay for your home. The best way to do that is to look at comparable properties — what other similar homes have sold for in your neighborhood.

And that process is more complicated that you might think.

Finding Your Home's Market Value

Whether or not your home has a swimming pool, a view, has a second story or is located on a corner lot — even what construction materials were used — can be important to a buyer in determining value.

These items may or may not matter, depending on your neighborhood. This is where an experienced Prudential Locations Realtor can help you analyze the relevant values of the comparable properties and come up with a pricing strategy.

An even more detailed approach to determining value is the price-per-square foot method, which takes the same comparable properties and normalizes everything that is the same about two properties to give a value to what is different about one or the other.

For example, if you have a totally homogenous neighborhood, the price-per-square-foot is exactly the same for each unit. Then you apply that to a condo building. Units on a particular floor have a certain value, but if you go up 10 floors, the value increases because the view is better. That difference is the value of that feature — in this case being on a higher floor.

Figuring out the price-per-square-foot can often more accurately describe what is happening in a particular market.

Here is another example: Let’s say last year the median sale price in a neighborhood was $1 million and this year it went down to $800,000. When analyzing the price-per-square-foot in more detail, you may find it was just three smaller homes that sold this year. So where you thought there was a significant drop in price in the neighborhood, turned out to really just be a change in the size of homes that sold. Your Prudential Locations Realtor will make sure that numbers aren’t misinterpreted, and will give you a true sense for market value.

Additional Factors

In addition to comparable past sales and competitive listings, experts say the condition and location of the property can have an effect on price, depending on the neighborhood.

Location on a side street becomes important if the main street has heavy traffic.

Once your agent has considered these factors, the real trick is positioning your house in the marketplace. As Realtors, our job is to look at the past sales, and then look at the competition to see where your house fits in. Then we develop a marketing strategy so we can appeal to the right set of buyers.

This strategy might involve repairing damaged items or painting — the main objective being to get the highest price for the property in the shortest amount of time.

A lot of what Prudential Locations’ agents do is based on experience and training. Some of it is objective — past sales and competitive listings — but a lot of it is subjective. It’s not an exact science.

Positioning a home has to do with accentuating the home’s positive features among the competition.

Let’s say you’re up against four homes that have been extensively renovated and yours has not. It sounds tough but that becomes part of our strategy and how we position or market your home. In some cases, we can focus more on how many times people would really rather do their own renovations, pick their own finishes and colors — turning the fact that your home hasn’t been renovated into an advantage.

Bottom line: The value of a property is not determined by the seller or the agent. It’s all about how the buyer sees the property that matters. Only the buyer can say, “This is a million dollar view, and I’m willing to pay that for it.”

Talk to a Prudential Locations agent today to find out what your home is worth.