As a licensed realtor in the State of Texas, I have had the privilege of assisting many divorcing couples, and many families in probate matters, to establish the market price (value) of a home. As you may imagine this can be contentious at times and it is somewhat comforting to know that solid statistics from irrefutable industry sources and my more than forty years of professional experience fully support what I recommend to my real estate clients in these matters. I have provided expert witness testimony which further validates my position as an industry expert in these matters.
Where Can I Obtain A “Market Value” of My Home?
All too frequently people mistakenly look to the internet for answers. They will look to
Internet sources like Zillow®, and Trullia® for information on the “value” of their property or
The county tax assessor’s office for the “assessed value” of the property.
I wrote this blog to help guide you on the fundamental importance of setting the right price for your home. When working through the division of marital assets in a divorce it is essential to have accurate valuations. This blog is intended to help guide you in how to find the accurate valuation; however, the true valuation of your home is always established by the buyer and the closing price.
Everyone knows you can sell your home quickly and for more than market value in a seller’s market with low inventory. But what about selling in a buyer’s market and getting more than list price? Sounds impossible? Well, it’s not, because I’ve done it
many times, in some of the hardest markets we've seen in the last 4 decades!
The purpose of this blog is to stress the strategic importance of setting the listing price on your home where you can sell quickly, and over list price.
Properly pricing your home is the single most crucial consideration in real estate sales. Sellers must understand and know the considerations that determine a home’s value — which is why I spend so much time on this subject.
Happy is a man who finds wisdom and who acquires understanding,
Proverbs 3:13 (CSB)
Setting the price at which to sell your home is not a simple formula, nor totally mathematical. Many elements factor into the decision. Throughout this blog, you will read examples of similar and similarly situated houses that sold for very different prices, along with the reasons for the disparities.
You may be thinking “houses are selling fast in my city” so you think yours will be easy to sell – and for top dollar. Never mind all that advice about curb appeal, decluttering, and staging because everything is selling these days, right?
Well, not quite…
Even in a seller’s market – which we have had here in DFW for more than 5 years now, even through most of 2024 – there are still some homes lingering on the market for weeks or months, while the homes around them go under contract within days. If a seller hasn’t received an offer after two weeks, they must quickly discover where the weakness lies. The answer almost always comes back to two variables: price and condition, though marketing also plays a strong runner-up role.
Question? What do homebuyers care about more than “location, location, location” in finding the house of their dreams?
Layout? No.
Amenities? No.
Luxury Upgrades? No, Sorry.
The answer is…
Price!
The first thing buyers look at in their home search is the price. No matter how perfect the house is, it’s a big “NO” if the price doesn’t line up with a buyer’s budget.
Even if you miss the bar by only a thousand dollars, you could lose out on an entire pool of potential qualified buyers which I will address later in this blog.
In a recent study, 70% of top real estate agents agreed that the biggest mistake sellers make is overpricing their home. Real estate agents deal with this every day. Homeowners fantasize an ideal list price for their home even though it doesn’t align with the current real estate market.
That’s why I’m here - to give you the dose of reality you may need. Below I will discuss the biggest myths you need to be aware of when pricing your home—especially if you want to sell it fast and for top dollar!
PRICING MISCONCEPTIONS
Before I get into what determines market value and how to price your home, we need to discuss what does NOT determine market value. Let’s jump right into this difficult conversation and get this first hurdle out of the way.
COMMON SELLER MISTAKES
Factors That DON’T Affect Your Homes’ Market Value
What you paid for your home, even if it was not long ago. What you need, to make it possible to buy your next home. What you want, to pay off debts, medical bills, to buy new furniture for your new home, or to help fund your retirement–although
it will help. Unfortunately, none of these reasons determine the market value of your home.
What it costs to rebuild your current home in today’s economy. What your neighbor says their house, or your house is worth. What another real estate agent might say who may be inexperienced. None of these reasons influence market value.
What taxes you pay on the ‘value’ according to your county Tax Assessor. What Zillow says and other online companies with limited knowledge about your neighborhood, your home and amenities, or past sales in your area. And what sentimental feelings you have that bring you much joy, unfortunately do not create market value for the next buyer.
For many sellers the hardest thing to let go of is the 'value' they put on the treasured memories they made and cherish in their family home. However, sentimentality has no dollar value.
Although you have emotional connections to your home, the buyer does not. Most buyers are being shown many properties, and they do not expect yours to be ‘the one.’
I understand how difficult it is to make what may seem like a ‘cold-hearted’ business decision about a home that holds these memories. Emotions can make it hard to have a realistic view of your home’s value. You must decide to accept advice from an expert (a Realtor) with an open mind and be as objective as possible.
Key Takeaway: The worst misconception on what your home is worth is by Zillow and other internet real estate sites. Zillows’ “Zestimates” and other online companies are usually never correct—do not trust them. Remember not long-ago Zillow ran into serious financial issues resulting from their 'pricing algorithm' - why should you go down the same path?
The guidance of an experienced Realtor can be priceless and the determining factor in not only whether your home sells quickly, but also whether your home sells for the highest price. Rejecting the advice of an experienced Realtor or trying to sell on your own can be costly.
Guessing Instead of Researching Price
Basing your home price on what the neighbor down the street has listed their home for is not a reliable method of pricing your home for sale. The Comparative Market Analysis (CMA) is still your best source for setting an asking price. If a home in your area sells for a low price, don’t assume yours is worth the same amount. Your home might have something to offer that the other one didn’t. Let the CMA be your guide and get the advice of an experienced real estate professional.
Why Comparative Market Analysis vs Online Values?
A CMA is far more helpful and accurate than automated online values. Online values do not consider the “selling points”, including all amenities, upgrades, pools, views, etc. They do not calculate these additional values or deductions to the property’s
final value in comparison to other properties in the neighborhood, which can often make a material difference in the value of your home.
An experienced Realtor has access to much more market data and know-how to make these adjustments. They will also answer any questions and recommend the most realistic list price based on your goals and objectives, beyond getting the highest dollar in the shortest time. Along with an understanding of how the value of a home is determined, the current market data must be considered.
Elements of A Comparative Market Analysis
- Sold listings – Past History
- Pending Sales – Possible Comparable Sales
- Active Listings – Your Competition
- Expired listings – Market Rejects
Here are the steps to know what your 'market value' is and how to determine your list price:
- Sold Listings are the basis for your homes’ market value.
- Once market value is determined, then you look at Pending listings. Your agent should call the listing agents that have these listings to find out when each home will close and if the sales price is close to their listing price.
- Then you look at Active listings to see where to place your home on the market to be competitive.
- Why look at Expired Listings? These are homes that did NOT sell. Your Realtor should do research to find out why, so you can consider these facts while determining your price—you don’t want to make the same mistakes!
Advantages Of Hiring A Realtor
My strong advice is to use a realtor experienced “listing agent” in real estate selling. They will understand the complexities of what you are facing and guide you through the difficult process of selling your marital property.
My website is packed with 16 GOOD reasons and the advantages to hiring a realtor to help in any selling situation. You will also find out why you should hire a ‘Realtor’ vs a ‘Real Estate Agent’ -– there is a difference! Go to:
www.genimanning.com/the-realtor-advantage.
UNDERSTANDING LIENS WHEN SELLING YOUR HOME
