What is your house really worth?
Short answer: It depends.
A lot of people see your house differently. As the seller, you see it differently than anyone. The buyer, appraisers, lenders, and real estate agents, all see your home’s value from a particular vantage point.
As a veteran real estate agent, I can tell you there is only ONE view that matters when selling your home, and I think it will surprise you. (Hint: it’s none of the above)
Your Home’s Value in the Eye of the Seller
Seller’s see their house more romantically than anyone. It’s not just a building, it’s a home. A sacred temple of memories. They recall all the burned Thanksgiving turkeys and how Mom finally learned to cook properly after ten years. They reminisce about that place in the livingroom where junior finally took his first steps. Then there’s the new shag carpet they installed fifty years ago, and the horsehair barstools they imported to complete the look. “It’s retro!” They cry in defense, “C’mon, man, it’s hip! Buyers will dig that, daddio!”
Even the least sentimental homeowners though, will remember such things as what they bought the place for and what they spent on improvements. They do a quick addition, and decide on what they feel it’s worth. “Purchase price plus renovation costs equals selling price now. Obviously.”
Your Home’s Value in the Eye of the Buyer
To the buyer, a house is a house. It’s a product to buy. Or, most commonly, it’s a project. Buyers don’t see Thanksgiving turkeys and toddlers. They see renovations and installations and improvements they want to make. They see expenses. So, to them, the value of the home is often the asking price, minus a compensatory renovation amount. “It’s worth less than asking because of all the time and effort we’ll have to put in to make it liveable. Obviously.”
Your Home’s Value in the Eye of the Appraiser or Lender
Appraisers and lenders, however, look at how it compares to other properties to determine value. They look for properties similar in age, location, size, and health. They’ll make adjustments on the price to compensate for differences. It’s a bit of an art, since no two are same. The Lenders vantage point is that of protecting their investment. ..the mortgage money they put up.
Your Home’s Value in the Eye of the Real Estate Agent
In eyes of a real estate agent, the unique features your home boasts, ultimately don’t matter. You may have nice park behind you, or be on a quiet cul-de-sac, but it really comes down to what buyers want.
If they have a lot of choices, they’ll be choosy. If the market is sparse, they’ll be less picky.
The real estate agent needs to consider what would the buyer actually get in a car and go look at? Is your house on their list? How does your home sit in comparison with what they would look at?
Here’s the secret about buyers: they want what they want.
Think of it like a pair of shoes. No matter how gorgeous the shoes, no matter the quality, even a deep discount on the most exquisite pair will not entice someone to buy them if they are too big.
It’s about the fit, not the features.
What Really Determines Your Home’s Value
Regardless of how anyone sees your home, there is one metric that determines your home’s value with immense accuracy: current, real-time sales data.
At any moment in time, an agent can access those behind-the-scenes numbers and know for a FACT what buyers are willing to pay. I can tell you what has sold, in what neighborhood, and for how much.
The number don’t lie. Which means, when you’re wondering what people will pay for your house, I can tell you. I can even tell you how long it will likely take to sell your home. Not because I’m magical or because I’m guessing, but because I’m basing my opinions on actual, real-time data, which allows us to make fairly accurate predictions.
Thinking of Selling?
Check out this Prepare To Sell Checklist to give your sale its best chance!