Do not, under any circumstance, rely on one of the web sites that have "guesstimators" to determine what your home is worth. There are many reasons you shouldn't, but the main reason is that they are wrong!
When Listing your home, two determinations need to be made - figuring what your house should actually sell for (remember, it is going to be based on comparable sales in the vicinity, the features, the square footage, the lot size, the condition it is in on the day it is Listed, and the competition), and then the Listing Price necessary to attain that full value.
Usually, my preference in today's market, is to List the house 3% above what I anticipate it will sell for. Therefore, the entire issue rests on determining the current value in the market, on the day it hits the market.
Also, it's important to recognize that its value is based purely on what a willing buyer will pay for the house - regardless of what you might need out of it or what you would like to get out of it.
Your Agent is your primary source because your agent has access to records you may not have access to, including past sales in the neighborhood, in the wider vicinity, or in the school district.
Your Agent has access to every Listing sold in the past 8 years or more, including the description of every sale, photos of the homes, details of each home, Google Maps to identify whether other homes had impediments, such as no rear yard because of a steep slope.
Your Agent has access to the County Tax Records which, among other significant fields, include some semblance of square footage (which is usually erroneous for reasons I'll discuss below), lot size, and previous sales and sale prices for each home.
Your Agent also has access to every current or recent sale and can see the Price at which they were Listed and how many price reductions they had and how often.
This is an example of the History of a Listing, available to all agents, that should give you a clue that not all Agents know what they're doing. (It
|Bad, but not atypical, Example|
In this example of pricing run AMOK, start at the bottom - when it was first listed, and work upward. (I have deleted the address and the Agent.)
Listed at $799K on 7/26/2015
Reduced by $10K after 1 month.
Reduced $14.1K 2 weeks later.
Reduced $15K 3 weeks later.
Reduced $10K 2 weeks later..
Taken off the Market on 12/07/15
Re-listed at $735K on 12/09/15
Reduced $10K 6 weeks later.
Reduced $100.00 7 weeks later.
Reduced $10K 5 days later
Reduced $14.9K 2 weeks later.
Reduced $100.00 2 weeks later.
Expires on 6/04/16 at $699.9K
It's re-listed again on 06/04/16, now at $687,900. It then goes on and off and on and off until, at the last entry, it's been reduced to $650,000.
(As a brief update - it is now 1 month later than my initial entry. It expired again and is back on the market again at $650K. Still no contract!)
This has been on the market over 1 year, been reduced $149,000, and had 11 price reductions. AND IT HASN'T SOLD!
I use this as an example because the poor Seller has had to prepare for showings for more than a year, has had to continue paying the mortgage on this, and will not get an offer over the current Listing Price. Essentially, they are now $150,000 below their Original Listing Price.
Assume I am going to List your home because I can use realistic examples.
Homes in a Subdivision where the price range is from $250K to $800K will generally sell for a similar price to other home sales in the same subdivision. Assume there is a different value for homes with a finished basement versus an unfinished basement, versus a slab.
Looking at past sales in that subdivision, it's not difficult to determine the value of each of those possibilities. For example, a home on the slab is the lowest priced, the unfinished basement is worth $30K more than the slab, and the finished basement is worth perhaps $50K more than the slab home and $20K more than the unfinished basement.
So far, I have "equalized" the value of the homes so that in listing your home, I have a starting point.
Now we get a little more detailed and look at the square footage of all the recent sales in the neighborhood, because that can vary. Excluding the basement for a second, we can get the square footage from both the listing of the sold homes and from the County Tax Records.
Make believe a 3,000 square foot home (according to the Listing) sold for $300,000. So we have another clue - a home in your subdivision sold for $100 per square foot. And if I know the square footage of your home, X $100 per sq. ft. we have your selling price! Right?
Not quite there yet. For starters, the other home has a finished basement. (I would know that from looking at the Listing.) and when I go to the Tax records I see that the "Above Ground" square footage is 3,000 sq ft. That means there may actually be as much as 4,500 square feet including the basement. Now that other house is only valued at $67 per square foot.
Incidentally, you would be amazed at how erroneous the Tax Records are in the "square footage area".
Assume I can reconcile the square footage issue. Then we move on the Lot Size because that really matters in value - especially if it's usable acreage. Cul de-sac? Granite? Number of Bedrooms? Baths? Half Baths? Hardwood floors? Marble Tile? Carpet? Screened Porch? Deck? Usable rear Yard? Fenced Yard? Heated Barn? Ceiling height - 8', 9', 10+'. Coffered Ceilings? Swimming Pool? - Above ground, vinyl, gunite, Pebbletek?
What we're looking for is a way of determining what added value you have versus the other homes in the neighborhood. Or perhaps they have features you don't have. It all helps nail down the value of your home.
Now, we need to go outside your subdivision, because frequently, prior real estate Agents who have sold homes in your subdivision will look at prior sales in the subdivision, with doing any detailed analysis. And they will have priced their listing, in your neighborhood, well below what it's worth. And those lowball listings can take down the value of the entire neighborhood.
So, we go outside the neighborhood and look for homes, now focused within your school district, perhaps $100,000 below what we think yours is worth, and $100,000 above what we think yours is worth.
Now we're looking at sales that have occurred within the last 3 months (or 6 if necessary).
Even though there may be 25 or 50 homes that are similar to yours, that are in your school district, that have sold within your expanded price range, they all need to be analyzed, in as detailed a manner as those in your neighborhood.
What we are looking for is a justification for setting a valid selling price expectation, based on recent sales - not only within your neighborhood, but outside your neighborhood.
And, in all that research we will have been able to not only determine a reasonable expectation for a selling price, but by adding 3%, we have a valid and perfect Listing Price.
And, because of the details in the research, we will have determined all the features that make your home unique in the market and desireable to potential Buyers. It is those features that support the perfect price and then need to be highlighted in the Listing material that spreads across the world via the internet.
As a final note, when the Buyer has the home appraised, which his Lender will do, I give ALL the source material to the Appraiser so he knows WHY it was priced where it was, and WHY the Buyer would believe he was paying a fair price - a PERFECT PRICE.