Being a Real Estate agent I must evaluate properties daily. Whether I am putting an offer for a property or listing a property for sale. There are a lot of factors which go into determining what a property is worth. There are many ways in which we learn how to price out a property in our courses. They are all valid methods and many agents use these methods to price out properties.
Below the graphic is a list of things that do not matter and have no impact on the current value of your home. All home owners think these things matter when in reality they do not mean anything. Here is a pictorial that I have in my listing presentation.
What you paid for your house: A person buying a home does not care if you got a deal or overpaid for your house. It is irrelevant. What you paid for your house is very personal. It should not come up in negotiations.
What time you invested in the property: It is a good selling point to say that you upgraded the kitchen or windows. Whether you did it yourself or you paid for somebody to do it, the person buying your house is not going to give you a cheque because you did some manual labour.
What you want to net from the sale: It doesn’t matter what you need to collect to pay for your new house. You should not even bring it up that you purchased another house right now. It shows that you have a deadline to move.
Family, friends and neighbours: It doesn’t matter what these people believe the property is worth, or what a wannabe an agent friend says it’s worth. Your property is worth what somebody is willing to pay.
So that was a list of what doesn’t matter. Here is a list of what does matter:
Comparables sold for on your street in the last three months: The most recent and comparable house to yours is a huge gage at pricing a house. It sets the bar in pricing your house. In a hot market you can go up but in a slow market you must go down from there. That’s the way it works. The only thing that might separate you from them is if you have some features they don’t or there is a significant difference which is appealing to people.
Borrowing rates and flexibility: If the interest rates on mortgages are cheap and easy to get it will shoot the housing market up. If the direct opposite happens the market will slow down. Either or this affects the market and the price of your house. The more cheaper the rates are and easy to get, the more buyers, therefore less inventory and let the bidding wars begin. Vice Versa applies here.
Desirability: If you have a beautiful house and it is in a great neighbourhood, you will sell your house, unless you price your house out of the market. Usually even in a recession people who have a great house and location sell. If you house has not been cleaned in two years it will not sell or the price will have to go down. These two factors regardless of the market determine if a house will sell.
Location: This is a huge factor in selling or buying a house. How many people desire the location of the house? Is it a corner lot? Is it close to schools, amenities and malls? How close is it to public transit?
Well I hope this helps to understand what matters in selling your house and putting a worth on it. There other pricing strategies which I go through but you can call me in person to get my strategies. Take a look at my graphic below.