How Much is My House Worth?
Unlike most fixed assets, land and property has the ability to appreciate over time. Therefore when you are about to sell your house, it is imperative to estimate, as accurately as possible, how much it is worth.
It’s important to know the Market Value of your house, as it is the final price buyers pay. This value is different from the listed price and is usually compared with the rest of the market.
When determining your property’s value, here are the few things you have to keep in mind.
The Local Area
First and foremost, you need to look at any houses that were recently sold in your neighborhood. If you’re in an urban area, look around a 1-mile radius, but expand the focus perimeter a bit if you’re in the countryside.
For a better estimate, try to gather data of houses sold within the last six months. Since values change with time, recent sales will paint a clearer picture.
Check out similar properties
If you are able to find a house like yours, you’ll get a better idea of the price of your home. For the best value approximation, try to compare prices of houses sold with similar condition, interior, exterior, location, and dimensions.
Having knowledge about the prices of similar, recently-sold houses will help you set up a justified price tag for your house.
Keep Tracking the Market
The market is constantly changing and you have to make adjustments to your estimated value accordingly. Currently, the economy is undergoing rapid changes and there is a strong possibility that even prices from 6 months ago might have no relevance.
Discuss with your real estate agent and make sure you are not listing your house below or too high above the market price. Specifically, keep an eye out for these three numbers in the current market:
Clearance Rates: This is a good indicator of the demand for houses in the current market. It denotes how many properties were sold during auctions and also indicates the properties sold before and after the auction.
Median Price: This is the average market price of a house in a certain region. This number also includes properties that are under construction; therefore you cannot rely only on the median price.
Days on the Market (DOM): This represents the average number of days it takes for a property to sell in an area and counts from the date a property was listed, until it sells.
Sometimes the aforementioned indicators may be a month or two old, so make sure you are aware of the latest rates and numbers before selling your house.
When setting the price for house, make sure to consider all the market activities and list it accordingly. While some experts recommended that you set your price a little above market value, if you price is set too low or too high, it is almost certain that you will lose potential value.