In the Kansas City area I visit about 4 sellers a week that are thinking of moving. Yes, they are interested in my proven marketing strategies, but more than anything else they want to know what their home is worth and why.
So, what's all the mystery??? How is it that an agent figures this out? Well, let's first start with what doesn't count...
- What your neighbor told you they sold their house for
- Your tax value
- Your last refinance appraisal
- What you have spent on maintenance or upkeep
- What you need to buy your next house
- What you owe
The market does not care about any of these. Albeit, sellers definitely do! What you owe on the home and what you need to get for down payment to get into the next home is important to deciding if you should move or not, but it doesn't have any affect on the market value.
What we do is really very simple. We take many cues from our appraiser friends. You may not know this, but when you refinance the lender has certain rules they send to the appraiser. These rules tell him/her what houses are 'acceptable' to use as comparables. The rules for a home purchaser are different. In fact, they are usually more stringent. That is why a refi appraisal is rarely the market value. This is very confusing to most sellers. Think of it this way...if you have a pile of information and you can only pick out certain pieces... depending on the criteria of the pieces you can choose your final number will be different.
Also, appraisers don't give you all the value on items that you improve. For instance, if you add granite and spend $4,000 on it, the appraiser will most likely give you $2,000. Same goes for new windows, new roof, siding, etc. It is not a dollar for dollar value. Landscaping is the only upgrade that gives you an almost dollar for dollar return.
As a listing agent, I am trying to find the highest price a buyer will pay for your house. The buyer will pick the best property for the least amount of money. So logically I need to see what our competition is going to be. What else in your school district (high school usually) is for sale with your number of bedrooms, baths, garages, finished or unfinished basement with generally the same square footage? Then I add for your better amenities and subtract when the competition has better amenities than us. Items would be cul-de-sacs, backing to trees, backing to roads, walk out basements, etc. I come to a value on that and this is usually my asking price.
Then we look at what has sold and closed in the last 3 months in a 1 mile radius. Depending on the area and the uniqueness of your home it may be 2 in your neighborhood and 1 out of your neighborhood. I visit with my appraiser friends quite regularly to see what the parameters the lenders are setting currently as it changes frequently. Then I do the same exercise as above... what do they have better... what do we have better... This once again gives me a number and this tells me what we should expect to get after negotiation.
Once we have these 2 numbers, the seller can make a decision if they want to move or if they want to stay. There are almost always other circumstances unique to each family... savings amounts, debt amounts, jobs, schools, timelines, etc. All of this information goes into making the right decision for each family.
Due to my extensive experience, I can guide you through the decision making process and often will render an opinion when asked :-) You may be surprised that my opinion is that you should stay put and not sell. Please remember, not all agents are created equally, and I am here to help you decide what is best for you! Not me.
If you'd like a market analysis of your home or have a question about this procedure, please call me anytime! 816-365-2225 or contact me at Cathy@askCathy.com
Click on the picture on the right and it will take you to a program that allows you to enter your zip code and it tells you the trends of your area! It has some really cool info! I have one set up for my area, you should too.
I hope this has been helpful and I look forward to answering your questions!