Pricing Your Home
Let's take a look at the many factors that influence the ultimate market value of your home.
Current market conditions will also have an effect on the value of your home – is it a buyers or seller’s market?Now let’s take a closer look at these valuations.
Your valuation – This is normally an emotional valuation and very often inflated.
Bank valuation – Although market related it is also dependent on your financial ability to service the mortgage.
Insurance valuation – Based on the replacement cost of your home should the house get destroyed by fire or flood etc. very often the insurance companies start your premium based on the purchase price with an annual increase. However this is not correct as the purchase price would have included the land and the land will not normally be destroyed!
Municipal valuation – This is the valuation that they use to determine your rates and taxes. This valuation could be lower than the market value, however this will depend on their valuation criteria.
But the REAL VALUE of your property is what an able and willing buyer is prepared to pay for your home. This is the price you need to determine.
A competent estate agent should provide you with a comparative market analysis (CMA) which will include recent sales in your area and asking prices of competitive homes.
The ultimate listed price is coupled to time – the higher the margin above REAL VALUE, the longer it will take to receive an offer
Setting a price based on informed current local knowledge and expertise along with access to the latest marketing statistics including recent sales in your area, current competition and local demand is imperative in developing a market strategy and correct pricing of your property.
Nobody wants to lose money by pricing their home too low, or to price themselves out of the market by fixing too high an asking price.
Pricing your home correctly from the outset will not only achieve the best results for you, but will also help target the correct buyer.