Lately, with the popularity of Zillow and Trulia and other AVM (Automated Valuation Models) the public is even more misinformed 
about what the value of their home really is. The main problem with AVM sites is, they are based on limited information (factual data), such as the size of the house, number of rooms and bedrooms, age of the house, and lot size. They do not filter the sales used for factors like arms’ length transactions, condition of property, length of time on the market and sales concessions.
In order to price a home correctly, there are a lot of factors to be considered. The first one being what other similar properties have recently sold or rented for, and using that as a place to start. It depends on the local market, to determine what “recently” means. If you are in a hot market area, you could probably get enough comparable properties to consider by just going back a month. If the market is slower, or if it is a unique property, you may have to go back as far as six months. I personally don’t like to go back further than that, if I can at all avoid it.
Another important thing to consider is how quickly the homes rented or sold. If the seller/landlord really wants to move their property quickly, the amount of time it took to rent or sell the property is also a factor. I typically include the days on the market for the higher and lower ends of the price range I give my clients.
For rentals in the Brevard County Florida area, the time of the year is a factor on the price of the rental as well. We have a hotter rental (long term residential) market in the summer months, due to families preferring to move before the school year starts in August. The busiest month for rentals is typically July. Short term “Snow Bird” are not included, they peak in January. The holidays are typically a slower time for both sales and rentals, not too many people want to move during the holidays. So when you list the home also has an impact on how to price it.
There are often items that affect the value of a property, but are hard to put a price on. The value can only be determined in the motivation of the buyer or renter, or what there needs are. I recently listed a home for rent in a great neighborhood, the yard is really nicely landscaped, it’s got a huge private screened patio, but the master bathroom does not have a shower. This has been an obstacle in getting in rented and will most likely adversely affect the price the owner will get. It didn’t the last time it rented though, so maybe not.
Basically pricing a home can be a tricky thing and its best to leave it to professionals, with local experience, to get the best price you can, in the least amount of time.
Comments(4)