“What is My Home Worth?” How Real Estate Agents Help with Pricing
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One of the first questions people ask related to home selling is “What is my home worth?” Sure, one can quickly get a suggested list price using an online tool. However, an algorithm can only crunch the data a user enters. Because a live person doesn’t review the information, homeowners don’t always have an accurate picture of their home value.
Getting help from a real estate agent is the best way to determine what a home is worth. Top real estate agents list properties to sell quickly at or above the asking price. And listing the home at the right price is key to successful home selling.
Real estate agents put a lot of thought into pricing a home. Many have years, even decades, of experience they use to determine the value of a home.
How Real Estate Agents Answer, “What is My Home Worth?”
Determining the value of a home involves data analysis, insights from experience, and collaboration. Real estate agents follow these steps to pinpoint a home value.
- Conduct a comparative market analysis by looking up sales of similar homes in the area in the MLS database in the last 90 days. This part of home selling is often called running comps. The most accurate comps will have the same number of bedrooms and bathrooms and about the same square footage and lot size. Once the agent finds a few comparable properties, she develops a baseline home value.
- Consider selling points of the neighborhood like schools, stores, restaurants, and recreation and what they know about buying trends.
- Walk through the house with an eye for what will make it attractive to buyers and what might turn them off. Real estate agents know a separate laundry room tops the list of what buyers want right now. Other hot features they will be looking for include exterior lights, ceiling fans, energy efficiencies, and patios. Buyers also want spacious, organized, and clean homes and a neutral—yet inviting—space.
- Talk to other agents on their team and ask what they think about the value of a home, based on their experiences selling other homes in the area.
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Determining the Right List Price in the Home Selling Process
Setting a realistic list price makes life easier for everyone involved in home selling. If an unskilled or overzealous seller estimates a home’s value too high, the house might not be sold for an extended period. Houses that have been for sale for more than 30 days often go unsold for much longer because buyers’ agents and buyers think something must be wrong with the house. In a case like this, a seller will need to drop the list price, sometimes below the market value, to sell the house.
On the other end of the pricing spectrum, some sellers want the list price to be below the market value to generate interest from buyers. The sellers hope to start a bidding war to try and get more than market value in the end. This strategy sometimes works, if there is a seller’s market. Other times, it backfires: The low price leads buyers to think the house is only worth the list price.
When you ask your real estate agent, “What is my home worth?” you will get an honest answer about the market value of your home. Your agent will advise you to set the list price at approximately the market value to expedite the sale and get the proceeds you want from the sale.
Home Values in the Hot Seller’s Market
The price of housing continues to climb and inventory of homes remains tight across the country. Nearly 40% of existing homes sold nationwide in July 2022 sold at the full list price. As of July, the median price of existing homes has increased every month for 125 months. It’s the longest streak of housing price hikes in history.
Sellers with a lot of equity in their home, or who are downsizing or moving to a more affordable area, often benefit from selling in this market. Others need to consider the impact of selling when prices are high:
- Sellers must move somewhere when they sell their homes, and prices are inflated on most homes.
- When they want to sell their new house down the road, the market value might have dropped considerably since they bought it. They might be forced to take a loss or stay put until the market is more favorable for moving.
When a seller moves to a new home, and home values drop, they should be able to weather through the price dip unscathed if they stay put for several years and can afford their mortgage payments.
In real estate, there is a distinction between top and average agents. For the most effective pricing of your home go with a top real estate agent. If you’re in the Greater St. Louis area, you can find a top agent by contacting us at BHHS Select Properties--we have ten offices, so there will be one near you.
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