Property Value -
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What you market your home for is the advertised home sale price. Your advertised housing price allows room for you and the potential buyer to negotiate in order to reach a sale or contract price. Therefore you should add a margin amount for negotiation, on top of what you would like to finally receive in the hand.
Your actual home sale price is the price determined by you and the buyer after negotiating the market/advertised home sale price. It's the price the buyer is willing to pay you and is the amount agreed and signed to, by both you and the buyer, on the final contract of sale.
So how much is your home really worth? How do you determine your property value, and what will you get for it when you sell it?
Well...it depends on a number of factors:
a. The suburb in which your home is, i.e. inner city, suburban, regional
b. The size of your home, i.e. number of bedrooms and facilities
c. The style, age, and state of your home
d. The features of your home, i.e. special and or unique qualities which people will pay extra for
e. The current economic climate and/or real estate market cycle, i.e. buyers or sellers market
These are the major factors which influence your property value, housing price, and home sale price.
What you need to do to determine an accurate property value...
1. Get your Property Value by using an Independent valuer.
2. Get at least three house appraisals by three different real estate agents.
3. Get Property Values & Home Sale Price details off the internet.
4. Gather your own information on current advertised housing prices and actual home sale prices in your Area.
1. Get your Property Value by using an Independent valuer
An independent valuer is someone who is 'not' attached to a real estate office. The reason you want to avoid this situation, is to ensure that the house valuation given is as accurate and unbiased as possible.
Independent valuers can be found in your local area through the yellow pages. I would also recommend you check out who they do work for, how long they have been operating in the area and what other homes in your area they have done a house valuation for.
The cost of valuer (around $300-$500) is negligible compared with the disappointment, doubts, and stress it can save you, not to the mention decreasing the time it takes to sell your home because your advertised housing price was more realistic.
Lastly, make sure you let the valuer know that the property value you want is for Selling Purposes, not Bank purposes, otherwise you may get a lesser value.
2. Get at least three house appraisals by three different real estate agents
With this suggestion comes a risk. By inviting an agent to your home, you are letting the agent know of your intention to sell. Once an agent knows you are wanting to sell, the lure of getting a listing can create a frenzy. Once they get a sniff they will inevitably press you into trying to sign an 'Appointment to Act'. Don't do it!
Be strong. Before inviting an agent for a house appraisal you need to know why you are doing so, and ensure that you are ready for an onslaught. You need to be steadfast in your decision and don't let the agent persuade you into signing something you had no intention of signing in the first place. Take what they say with a grain of salt. Remember, they are experts at telling you things you would like to hear in order to get a listing. Just look at the facts and keep your emotions in check.
Your reason for having an agent is to give you a house appraisal (also called market appraisal) on what they believe your home property value to be. Despite the apprehension you may feel regarding this, a good agent who has been working in your area for a period of time will know more about the real estate market and your property value, compared with others in your area. It's up to you to then make a judgment on the information and home sale price estimate they provide you.
One house appraisal is not enough. You need to get a good sample of appraisals in order to make an accurate assessment. You will often find that the house appraisals given will vary from one office to the other. There will be differences in the quality and volume of information given; the advertised home sale price estimates, as well as style and presentation of the agent. You need to weigh up how much is truth and how much is just good salesmanship to win your listing.
If they are doing what they should be, a professional agent should not just walk around, view your home and make notes on the pertinent facts about your home. They should provide you with a written CMA (competitive market analysis).
A CMA should include details such as:
. current listings in your area
. homes sold in the previous 3-6 months
. a summary of what features of your home would appeal to a buyer
. local market conditions
. advantages and/or disadvantages your home may or may not have
. an estimate of the selling price
These are just some of the things that can be included on a well researched CMA. If the CMA has been researched prior to the appointment, you may find that all the features of your home won't as yet be included on the CMA.
3. Get Property Values & Home Sale Price details off the Net
This can be a good place to start. There are numerous sites you can find which will give you free advertised Housing Price & actual Home Sale Price information relevant to your area. These sites are often linked to Real Estate portals, such as www.realestate.com.au, www.domain.com.au and individual real estate company portals. You'll find them described with words such as
Property Reports, Suburb Profiles, Suburb Snapshots, etc.
Basic area details can be also be accessed for free, and you can get more comprehensive details in relation to your specific area and home by paying a fee. It's not a huge amount, but again it's up to you on what information you want to pay for. Some of the information will be provided by the real estate agents who do a house appraisal anyway, so don't fork out for information you can get for free.
FREE Suburb Reports/Profiles give you general details about your area in relation to demographics and facilities. It's good to know, because it can help you work out the type of people who already live in your area and whom your home would most appeal to. By knowing more about your potential buyers, you have a better idea on how, and who to market your home to and what would appeal to your buyers about your home.
Property Reports give you specific details about your address, and these you will generally have to pay for. Again, the information provided in these reports is already provided if you have agents do a house appraisal for you, since they access the same information via companies who provide statistics gathered by the Department of Natural Resources.
With good old fashioned effort, you can find out this information yourself quite easily. For advertised housing prices, try scanning the Real Estate Section of your local and regional paper for an idea on what people are advertising their homes for. Why not attend a few Open for Inspections and see for yourself the homes for sale in your area.
Get on the net onto the real estate portals once again and find which houses are selling in your area, how they are marketing their property, and their advertised home sale price. The advantage of using the net is that you get to view the property and to make more accurate comparisons. The use of photographs, virtual tours and floor plans give you more information again to base your comparisons.
For actual home sale prices, drive around your area and find homes that have SOLD on the sign, and ring the agent directly to find out what the home sold for. Also, something that alot of people don't realise is that the actual home sale price on homes can be found on the major real estate portals.
Real estate agents who use these portals to advertise, also enter in home sale prices of homes that have sold through their agency. They don't always provide the actual sale price, but mostly offer a price 'range'. You can easily work out the sale price after you've become familiar with the site. The reason agents do this (state a range rather than the actual housing price) is I suspect, to keep information from other agents and possibly because it requires extra effort.
In finishing...To ensure that you attract as many buyers as possible, it's necessary to understand the difference between your Property Value, advertised Home Sale Price, and actual Home Sale Price.
It's also important that you as a home seller understand what the current property market is doing, and at what point in the property cycle it is. The reason being, that regardless of your true property value, you may need to make adjustments to the advertised home sale price in order to attract more buyers and increase your chances of a sale.
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