Valuing a Property
“How do I know how much my home is really worth?” - is the most immediate question a homeowner asks in any market. But today’s market. Don’t let it be a guessing game. Your block has two foreclosed houses; they sold well below their taxable value. Does this put your home in a discounted category? No way.
Though we are still riding the roller coaster of housing market ups and downs your home may hold good value. As a broker for twenty years, I can say that the hardest times are over, for the time being. Expect another round of foreclosures, though, within the next two years. This is not speculation, it’s fact. There are a great many balloons coming due; re-written mortgages that weren’t getting paid are still not being kept current. But these are houses with owners who can not pay their mortgages; these home owners do not have the money for updates and repairs. You can understand how someone does not want to spend money on a lost cause. Small deficiencies can turn into major repairs in a short time. A leaky roof; a debunked sump sump; a broken dishwasher. There are almost always some serious issues with a bank owned house. Let alone the ones that are stripped clean of kitchen cabinets, or high end shower heads ripped out. This is the norm for a bank owned house. So, you really have an advantage over these homes because your house is occupied, and maintained.
For whatever reason, it’s time to sell your home. You call a real estate office and talk to an agent about selling your house. The agent visits you and assesses your property. The listing price suggested to you seems too low a price, especially after you figure in the closing expenses. But the market is stagnant. All of these bank owned foreclosures are selling for half the value from three years ago. Expect a low price, this agent tells you. Don’t be discouraged. There are a great many factors involved in the value of your home.
If you are truly think that you house has been undervalued, call another agent to price your house. Ask to see all the sales in your neighborhood and the immediate surrounding neighborhoods in the last six months. This will let you have the pulse on your market. The data should include if sales were private, bank owned, or short sales.
If you are still unsure of the value of your home, it’s time to call a licensed appraiser. It’s important to know what the loan value for a buyer will be. Nothing could be worse than putting your house on the market, finding a buyer, getting an agreed upon price, then having the back value your house below the sales price. Everyone loses, and you’ve wasted time and effort to arrive only at a great disappointment. Don’t put yourself, or a potential buyer in a position of failure.
I hesitate to say, since this is my industry, that even though a listing agent has his fiduciary responsibility with you, the seller, there are those agents that will encourage you to sell at a low value to make a quick sale. Put a great house on the market with the repo dogs and the offers will come, make no mistake. In the end, you’ve sold your home for too little money, you’re not happy with the check in your pocket, and you’ve lost faith in the real estate market. Make the effort to make an informed decisions. Check out your local market. Not all areas of the country are suffering from this market crisis. Know yours before you list your house.