Why do you think your home is worth so much more than the competition?

Why do you think your home is worth so much more than the competition?

I ask that question every time a potential seller thinks the asking price of his or her home should be a lot higher than with I've just shown. 

Let's remember - I didn't pull my number out of a hat!  It came from a lot of research into comparable properties.

So when the seller tells me his number, I have to ask, "Why do you think your home is worth so much more than the competition?"

Here's a sampling of what I hear:

• - That house doesn't have as nice of a kitchen as mine.
• - I have an extra half bath.
• - That house smells like dog.
• - I have a two car garage and they only have one.
• - My house is bigger than theirs.
• - My lot is two tenths of an acre bigger.

And so on, and so forth.  Well, let me tell you - I already know (most) of those facts and have taken them into account!  And they don't move prices anywhere near as much as you think they do!

Smelly houses and ugly wallpaper may make houses more difficult to sell, or ultimately cause the homeowner to lower their asking price below market value -- but don't start adding $10,000 or $20,000 to your price because of the comparison!

While your remodeled bath may have cost you $30,000 -- it didn't automatically tack $30,000 on to your home's market value.

I'm going to let you in on a secret. Appraisers, as part of the appraisal process, have to make dollar adjustments to the known value of comparable properties in order to come up with the value of your home.  And you may be very surprised at the values they use!

Your house is bigger?  As you can see from the above example (NOTE!  These are example numbers in my area -- your area may differ greatly!) appraisers assign a value of $25 per square foot.  Your home is 300 square feet bigger than the one next door that just sold?  300 x $25 = $7,500.  So don't think you can ask $30,000 more!

You have two half baths and the competition has one?  It doesn't matter that it cost you $8,000 to install.  It changes your appraised value by $2,000.

Two bay garage versus one bay garage?  $5,000 difference in these parts.  Now your second garage may help your house sell more quickly -- it's not going to add $20,000 to the value to your home.

One of the worst things you can do when trying to sell your home is overpricing it.  There's a good chance you'll get few showings and fewer, if any, offers.

And that offer you did get?  The price might just get shot down by the appraisal.

If you are not going to take my pricing recommendations and still want to overprice your home -- do yourself a favor.  Get a home appraisal before you put your house on the market.  It will save you lots of headaches down the road.