Somehow we all think our house is worth more than it really is. After years of living inside the same four walls, it can be easy to forget how the market has changed and what other people might think of your home. When you’re finally ready to put your property up for sale, it’s extremely crucial that you find out how much it’s really worth in today’s market.
The realistic value of a home will have a big impact on the entire selling process, from how you price a house to how long it takes to find a buyer. And in all likelihood, the number you come up with on your own will be higher than what a professional would appraise it for.
But that’s totally okay – as a homeowner, you probably have an emotional attachment to your home. When it comes to selling your property, it’s important to be as objective as possible and look at things from a buyer’s perspective.
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Selling your home is often an emotional experience, especially if you’ve lived in it for an extended period of time. For a variety of reasons, sellers are often deeply attached to the place they’ve called home for years.
That is wonderful, but it’s critically important that you don’t let your emotions completely take over your thought process when pricing the home for sale. (1)
In recent years we have seen the buyer’s market shift to a seller’s market in many parts of the country. This means the demand for homes is higher than the supply, giving sellers more negotiating power. As such, you may be able to get away with pricing your home slightly higher than what the market value is.
However, it’s still wise to have a realistic idea of how much your home is worth before putting it on the market. This way, you won’t be disappointed if/when a buyer comes in with a lower offer than you were expecting.
Use an online calculator to get an estimate
In today’s digital world, several tools are available that can help you get a quick and easy estimate of your home’s value. One such resource is an online home value calculator, which uses information like recent sales data and public records to generate a report. Websites like Zillow and Redfin are some of the most popular places to get an estimate. Although it’s a good starting point, take this estimate with a grain of salt – remember, an algorithm can’t replace the expertise of a real estate professional like we buy houses in Murfreesboro.
Get a professional appraisal
For a more accurate number, you’ll need to hire a professional appraiser. Appraisers are qualified individuals who have the experience and expertise to properly evaluate a home. The appraiser will take into account things like square footage, recent sales of similar homes in the area, upgrades and renovations, and any other factors that might impact the value of your property.
While an appraisal will cost you a few hundred dollars, it’s worth the investment to get an accurate idea of your home’s value. This number will be especially helpful when it comes to negotiating with buyers and their agents.
How much profit you will be making
A profit is what’s left over after you sell your house and pay off any debts associated with the property – like the mortgage, taxes, fees, and repairs. The amount of your profit will depend on a number of factors, including how much you originally paid for the house, the current market value, and how much you end up spending on repairs/updates. For the home that you’ve owned for several years, there’s a good chance you’ll walk away with a major profit. To make it easier for our readers to understand, let’s have a look at the terms and explain the calculations.
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It is the total amount you will receive from the sale of your home after all debts, costs, and liens associated with the property have been paid off.
To calculate your net proceeds, start by subtracting any outstanding debts on the property (like the mortgage, home equity loan, or line of credit) from the final selling price. Then, deduct any necessary repairs, selling costs (like real estate commissions and transfer taxes), and liens (like property taxes) from the remaining amount. Hence, whatever is left over is your net proceeds.
Mortgage balance: This is how much you still owe on your mortgage.
Closing costs: These are the fees associated with the sale of your home, including the real estate commission, transfer taxes, and other miscellaneous costs.
Repairs: If your home needs any repairs or updates before it can be sold, these costs will need to be deducted from the final selling price.
Property taxes: You will need to pay off any outstanding property taxes owed before you can sell your home.
Home equity loan/line of credit: If you have a home equity loan or line of credit, you’ll need to pay this off before selling the property.
Final selling price: This is the total amount you will receive from the sale of your home.
What if I owe more than my home is worth?
It is terribly unfortunate to owe more on your mortgage than what your home is currently worth but it happens. In this case, you’ll need to bring money to the table at closing in order to make up the difference – this is known as a “short sale.” A short sale occurs when the proceeds from the sale of a property are not enough to cover the mortgage balance. While a short sale will damage your credit, it’s often seen as a better alternative to foreclosure.
What to do if my house is not selling
Even after putting all the efforts to make your house look its best, there is still a chance it might not sell. In that case, you need to adjust your expectations. This doesn’t mean that you should lower the asking price – but you should wait for a while until the market improves or be more flexible with the terms of the sale.
Anybody can face a situation where their home just won’t sell no matter what they do. In a buyers market, there are more houses on the market than there are buyers and this can lead to your home being stuck in limbo for months or even years. If you’re in this situation, you may want to consider renting out your home or looking into other options such as investors and realtors who buy properties for cash.
Factors that influence the sale price of a house
We as humans are sentimental creatures, and our homes are no exception. It can be difficult to see our home as anything other than a place filled with memories. However, when the time comes to sell, sentimentality needs to be put aside and your home needs to be seen as an investment. After all, your goal is to make money from the sale – not to keep the home in your family for generations.
Following are the key factors that play a vital role in the sale price of a house:
Location: It is by far the most important factor that determines the value of your property. The location of a house is what makes it unique and, in turn, influences the price.
Condition: A great location can only take property so far – if the house is in disrepair, it will be difficult to sell at a good price. A bad-conditioned property isn’t just an eyesore, it also indicates to potential buyers that the home hasn’t been well-maintained and could have larger problems lurking beneath the surface. However, for us, it doesn’t matter what condition your house is in – we buy ugly houses in Murfreesboro Tennessee!
Size: Generally speaking, the larger the property, the higher the price.
Age: An older home will likely sell for less than a newly built home, all else being equal.
Updates: If your home is outdated, it will likely sell for less than a comparable home that’s been recently updated.
The market: The current state of the housing market – whether it’s a buyer’s or seller’s market – will also influence the price of your home.
A lot of things go under the hammer when deciding the final value of your house but taking the help of a professional will turn out to be fruitful. Whether it’s making a profit or avoiding a loss, the real estate market is tricky, and having an expert such as Tennessee home buyers by your side will make all the difference.
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