As you interview REALTORS®, they may
suggest a listing price on your home. Only you can decide what price to set,
but you want it to be realistic. The listing price is critical. Set it too
high, and you may not find a buyer. Set it too low and you cheat yourself out
Regardless of what you originally paid for your home and the cost of
improvements you have made, the price your home can command is what the market
will bear at the time you decide to sell it. You may consider hiring an
independent real estate appraiser. An appraiser has specialized training and
experience. Don't rely on assessed valuations made for tax purposes. Such
valuations may not be reliable indicators of value as these valuations are
made by mass appraisal techniques.
Comparative market analysis
Whether or not you get an appraisal, a REALTOR®
can develop a comparative market analysis. This analysis will describe homes
in your area that have recently withdrawn from the market. The analysis may
compare specific features of your home to others - the value of a corner lot,
a city view, or an extra bedroom, for example. The analysis may also point out
market fluctuations caused by the opening of a new school or business, for
example, as well as long-term trends.
If you do not have a good idea, based on reliable data, of what the price your
home can generate, you may decide to set a higher price thinking that if it
doesn't sell at first, you can come down. However, if you set it too high, you
may keep away buyers who are looking at comparable homes with lower prices.
Lowering the price later sometimes gives your home a negative image. On the
other hand, you don't want to set the price too low. You may be tempted to set
a low price because you feel the pressure of transferring to another town, or
you're afraid that your worn carpet will turn away buyers. Be realistic and
get advice from your REALTORS®.
Once you've decided on a price range, the REALTOR®
may help you calculate an estimated amount you might net from the sale. If you
have owned your home for several years, you may have built up a sizable
equity. Equity is the difference between the value of your home and the
balance on your mortgage After subtracting what you owe on your mortgage, ask
your REALTOR® what costs you will incur in
closing. These may include title fees, taxes, a penalty for prepaying your
mortgage, brokerage commission, attorney fees, and charges for preparing and
recording documents. Finally ask your tax adviser or attorney about the tax
implications of your proposed sale.