How do you decide how much to ask for your house?

[Deleted]

I don't plan on using a realator... but should i pay for a consult? Should i go ahead and pay for a full fledged appraisal? Can i pull comps myself? How?

How do i find out 'what its really worth'...

[HoneyBBQ]

You don't have to pay for a consult - you can just "interview" several and then take the average.

You could also wander around the neighborhood and see what other places are for sale that are comparable to you.

You can also search the MLS listings for those "under contract" or recently sold to get some direct comps.

If you can, I would pay ~$350 to get your home listed with the MLS - otherwise very few people will see it. Good luck!

[phil5185]

Go to your county website and look up your house on 'parcel search' (or a similar descriptor). It will probably show the actual sales price of your house when you bought it - and it will give the sales price of several similar houses in your neighborhood - the most recent ones will give you an idea of what buyers are actually paying (and what real sellers are accepting).

[WannabeWealthy]

You can't really determine how much your house is really worth IMO. The house I bought is the highest valued house on the block. I can't use houses around my neighborhood to price it's increase. We paid $5k above asking price for this house too.

[pushingit]

Well obviously your house is worth what someone will pay for it. It's worth it to look at comps and get the opinion of a Realtor or three, though. I think most people either grossly over or under value their home. People's value is often tied to money spent, money owed, etc. If you've lived in your home a long time, don't own much and haven't put a lot into upgrades, you probably think it's worth much less than it is. You probably will also be sticker shocked when you look at other houses to purchase. Many older people run into this.

If you're mortgaged to the hilt and have spent a lot of money on high end upgrades, you're probably hoping your house is worth a lot more than it really is.

[Deleted]

You can do comps yourself. It might be nice to have a professional opinion, but it is still just an opinion.

Just take recent sales and adjust up or down based on differences and you can come up with a value.

[jk70]

As others have said you can do comparables yourself but be careful of houses for sale on the market. Between houses for sale, houses sold, and houses under contract, the ones that are currently for sale generally are above what they end up being sold at.

when I sold my house this summer I did my own analysis (still hired a Realtor but it was more to make sure they weren't "buying" my listing). I found that a lot of homes for sale were people still thinking it was 2005. The ones that already sold over the past 6 months were a much better gauge.

As I tell everyone in this market, "there are people looking to sell (sell at what the market really is), and there is another group TRYING to sell - think they can get something near what they paid for it at the peak.

[moneywhisperer]

If you don't know how to pull comps, then I'd be concerned that you also don't know how to write a contract for sale or guide a buyer all the way through to closing. Do you have any realty experience that leads you to believe you will be more successful in selling yourself rather than listing with a Realtor? Are you going to use a deeply discounted service to get on MLS, or are you just doing Craigslist and things like that?

You may find yourself holding the property longer than you'd like because you were penny-wise & pound foolish.

[Deleted]

Thanks so much everyone. I will start on some of these suggestions right away.

moneywhisperer, i don't think i'll do everything myself through to the end without professional assistance/review. My husband is a stone mason. Our house is unlike any in the area. Its been faced with 6 inches solid mountain stone, has a gorgeous fireplace, stone walls throughout the landscaping, etc... In the past two years since the stone has been finished, i've had three people ask when we want to sell it... including a couple who actually came out to tour the house even though we were no where near ready to sell...
It could be that i'm overestimating its appeal, and I may regret trying to sell it ourselves, but while i don't mind paying for consults or contracting to perform a task i don't feel qualified to do, i'm not sure i want to give away a percentage if the house is going to sell itself...
? Does that make any sense ? Or am i really limiting myself not having a Realtor?

[Deleted]

Oped-
If you are in no rush to sell then you may consider a FSBO situation for a couple months, but please, at least pay to get a MLS listing. Many people look for homes online, and those not listed in MLS will not appear in a basic search.
As others have suggested, start with recent sales in your area and then adjust for REAL improvements... Unfortunately for you, appraisals (which your buyer will need) are based on square footage, number of rooms (including bed/bath), garages, decks, and condition.... All of the stonework in the world will not increased an appraised value, nor do granite countertops, stainless appliances...
Best of luck to you

[moneywhisperer]

oped, if you are in no hurry you can try for yourself for a bit, but if you don't know how to write a contract or qualify buyers you are going to spend a lot of time on lookieloos & not sell.

I have sold/bought several properties and only did one by owner, which worked out fine for me, but I'll tell you they didn't get best price or have competitive offers going. My personal opinion is that a Realtor gets you the best opportunity for qualified buyers to be looking at your property. Interview a few & figure out which one has the best grasp of market and pricing reality. You can use them or not but I think it will help you understand their value if you meet a couple of them.

[Deleted]

One investment you might want to make is a professional appraisal. One of our executives was thinking of selling his house and got some realtors who made an estimate of the value with the hopes that he'd give them the listing, then he brought in an appraiser. The appraiser's value was significantly lower (he didn't say how much).

[Deleted]

Ok. I'm thinking about the realtor thing. I'll have husband read this too...

... lizinmo... are you saying that vinal siding and stone appraise the same? That mature landscaping does not impact that appraisal at all? ... that quality of materials has no impact?

I know my real estate taxes went up when the stone was finished... they sent me a notice in the mail that i now lived in a stone house, and so the assessment went up... ?? ...

[thyme4change]

Don't get an appraisal. Even after all the hub-bub about how they were cracking down, the appraisal process goes like this:

Appaiser: How much do you think your house is worth?
Homeowner: I don't know - maybe $200k
Appraiser then looks at the paperwork for loan documents from the bank and sees that you want a $160k, 80% refinance.
Appraiser looks around neighborhood where 15 homes sold for $275k.

Appraiser values home at $200k.

[pushingit]

It depends on what type of appraisal it is. Desktop, which is based on size, comps and little else, Drive-by, where they come assess the property based on a exterior visual and a full appraisal, which is a complete look through, measuring to make sure the tax docs has the square footage correct, a look at the survey, etc along with comps. This is the only appraisal that you should ever pay for. If a mortgage company charges a fee for this, it had better be a real appraisal, which protects not just the bank but the buyer from over-paying for a home.

Finishes, inside and out absolutely matter. You don't get $1 for $1 back on some of these upgrades, but a house with the same square footage and similar layout right next door to each other can sell for vastly different prices in many areas of the country. Do you really think a buyer is going to pay the same for a home that has rattly old single pane windows, vinyl siding, peel and stick linoleum "tiles" and old carpets as they would for granite counters, real tile and/or hardwood floors, new windows and stone exterior? Are you nuts?

If your house sells itself, then no, you shouldn't pay money to a Realtor. The point is that a professional Realtor should be able to bring you buyers that will pay more than those who you'd find yourself. If they can't, then they aren't working for their money.

As for paperwork, you need a real estate attorney. Realtors don't really do anything other than fill in pre-printed forms. Once the offer is accepted, it all goes to the attorney and bank anyway. You can do it yourself. We did. When we had the offer, the buyer's attorney sent over a contract, our lawyer reviewed it, we signed and the ball was rolling.

[jkapp]

researching other houses for sale in your area is the best bet...tour them, compare and contrast to your own home, and then move the price up or down with realistic numbers. If you have things that are of high value but not necessarily in demand it may be a bit difficult without professional advice though (such as a pool, indoor sauna, three-seasons room instead of a deck, etc)

[Deleted]

Full appraisal is all we've ever gotten... I was amazed a few weeks ago when someone suggested that they had never had an appraiser come in the house... we always have. The last one was years ago though, to get rid of PMI (which we actuallly might have been able to do without a full.. ) ... It does not reflect current conditions.

Thanks pushingit... Thats more along the thoughts i was having... although i am thinking about the idea of a realtor, as others have pointed out the pros... we'll keep it in mind as we debate. We aren't looking to list until spring, which is a better time (and hopefully we find land that we want...)... etc.

[thyme4change]

I've had both kinds of appraisals, and every single time the number is within $1,000 of my gut instinct - even before the Internet could provide us with quick and easy research. Either I'm fabulous, or the whole appraisal system is still absolutely bull-droppings.

[8 Bit WWBG]

...:::"a full appraisal, which is a complete look through":::...

Agreed. My row of townhouses is the only one in the area that has a big grassy field behind it, which will not be built on. Its like having a giant private back yard. EVERY other row in the immediate area backs up to messy trees, or a road. I would expect a slightly higher value having that land than another house without it.

...:::"Another thing I'd recommend is having your own home inspection done.":::...

How does this work with the sellers? As a seller, I would want my own inspection done by my own inspector. I would not want to trust that the buyers inspector didn't "miss" something. Are you saying to get your own inspection so that you can fix anything that would be considered a major problem, before the buyers start looking?

My parents are selling right now, and they have priced the house well below others in the area, but are still not getting buyers. They refuse to "give" it away so they will just have to wait until they get the price they want.

[kinetickid]

Jan 3, 2011 14:15:22 GMT -5 @daphne87 said:

Good ideas suggested here (shocking!)

Another thing I'd recommend is having your own home inspection done. My in-laws saw three separate deals fall through because of the "surprises" that showed up. They finally sold, but lost over $40,000 from first to final offer. Just a thought -- good luck!

I agree. Home inspections are important for both buyer and seller.

Re: Determining asking price. This depends a lot on how objective you can be and how honest you are with yourself.

As was mentioned above, many people distort the value of their home, basing their inflated price on what they paid for it plus what they put into it (e.g. renovations or significant repairs), but that's not correct. Your house is worth what someone else will pay for it!

[pushingit]

<Thanks pushingit... Thats more along the thoughts i was having...>


NP. Although for what it's worth, if I was looking at two similar houses one upgraded and one not, I wouldn't pay a lot more for the upgraded one. Unless the upgrades were furnace, hotwater heater, roof. Finishes and appliances aren't worth paying for in the sale price for me. I'd rather pay a lower price and buy my own appliances and put in my own new floors, etc. Even though it might cost me a bit more. Why? Because where I live, assessments are only done about every 10 years and aren't based on those types of upgrades. Your tax basis is only raised when you get a building permit to do additions, decks, etc, or when these 10 year adjustments come along. However, your starting point for your assessment is your house's sale price. I don't want to pay taxes on 10K worth of new carpets and appliances year after year after year when I can install those things easily myself without changing my assessment.

Tax rates are high here, so 10K in assessment would cost me almost $300 in school, county and town taxes. Every year.

I can't believe people don't think of these things when buying. Whenever I see someone on HGTV complaining about dated carpet or older appliances I think, what are you nuts? Why do you want to pay for something like that as part of a home purchase?

[Opti]

"It could be that i'm overestimating its appeal, and I may regret trying to sell it ourselves, but while i don't mind paying for consults or contracting to perform a task i don't feel qualified to do, i'm not sure i want to give away a percentage if the house is going to sell itself...
? Does that make any sense ? Or am i really limiting myself not having a Realtor? "

Most buyers will discount your price by the realtor fee and offer based on that. The only time that may not happen is if you are in a seller's market
situation which is not most areas of the US now.

In some of the towns you can get see the sales records in person and
get your comps that way.

[jk70]

Good ideas suggested here (shocking!) [image]

Another thing I'd recommend is having your own home inspection done. My in-laws saw three separate deals fall through because of the "surprises" that showed up. They finally sold, but lost over $40,000 from first to final offer. Just a thought -- good luck!

Problem with doing this: If you do your own home inspection and problems come about you then HAVE to fix them or HAVE to disclose them. If you don't do your own inspection, the buyer's inspector may miss things and therefore you wouldn't need to fix them

[Savoir Faire-Demogague in NJ]

I can't believe people don't think of these things when buying. Whenever I see someone on HGTV complaining about dated carpet or older appliances I think, what are you nuts? Why do you want to pay for something like that as part of a home purchase?
You are not alone PushinIt.

[hoops902]

Jan 6, 2011 8:58:05 GMT -5 Savoir Faire-Demogague in NJ said:

I can't believe people don't think of these things when buying. Whenever I see someone on HGTV complaining about dated carpet or older appliances I think, what are you nuts? Why do you want to pay for something like that as part of a home purchase?

Because people are stretching themselves thin to buy the house and don't have the cash on hand to change that stuff themselves. Most people would rather buy a $125K house than buy a $100K house and put $20K into it because they have $4K for their 3% downpayment on the $125K, but don't have $20K available.

[HoneyBBQ]

As a seller, I would want my own inspection done by my own inspector. I would not want to trust that the buyers inspector didn't "miss" something. Are you saying to get your own inspection so that you can fix anything that would be considered a major problem, before the buyers start looking?

IME, it's so that the inspection the buyer does is performed smoothly and almost everything is already taken care of. It's nice to have a short, sweet list of things to do, rather than pages and pages of things that need to be screwed in, or tiny little items that no one cares about. Makes the house seem like it's "move-in-ready."

[kinetickid]

Jan 5, 2011 19:02:27 GMT -5 pushingit said:

<Thanks pushingit... Thats more along the thoughts i was having...>


NP. Although for what it's worth, if I was looking at two similar houses one upgraded and one not, I wouldn't pay a lot more for the upgraded one. Unless the upgrades were furnace, hotwater heater, roof. Finishes and appliances aren't worth paying for in the sale price for me. I'd rather pay a lower price and buy my own appliances and put in my own new floors, etc. Even though it might cost me a bit more. Why? Because where I live, assessments are only done about every 10 years and aren't based on those types of upgrades. Your tax basis is only raised when you get a building permit to do additions, decks, etc, or when these 10 year adjustments come along. However, your starting point for your assessment is your house's sale price. I don't want to pay taxes on 10K worth of new carpets and appliances year after year after year when I can install those things easily myself without changing my assessment.

Tax rates are high here, so 10K in assessment would cost me almost $300 in school, county and town taxes. Every year.

I can't believe people don't think of these things when buying. Whenever I see someone on HGTV complaining about dated carpet or older appliances I think, what are you nuts? Why do you want to pay for something like that as part of a home purchase?

Yeah, HGTV annoys me that way. About 90% of the homebuyers get stuck on the dumbest cosmetic things like 4 year old carpet, 7 year old white kitchen appliances, and any non-granite countertops.

I'd much rather pay less for a house and upgrade when and how I want.