Real Estate Articles | General
- Value of a Great Realtor
- The Good Old Days
- Things you should know when buying a Condominium
- Finding out the Value of Your Home
- The Return of the Investment Property
- Finding Great Fort Lauderdale Properites
- Realtors Need The Right Tool Box to Sell Your Home
- Ft Lauderdale Condos With Moorage
- Flipping for Profit
- Commerical Investing Basics
- Looking ahead at the Real Estate Crisis
- Time to Lower the Asking Price of Your Home
Fort Lauderdale Real Estate | Real Estate Articles
Finding out the Value of Your Home
How much is my home worth in today’s real estate market?
Numerous times this week I will have the honor, as a real estate professional, to be invited into someone’s home. Possibly, I will have never met them prior and will be invited there to discuss the value of their home. In years past this was a much more fun event. As prices were rising at over 1% a month, I often got the pleasant reaction, “I can get that much for my house!” I got to witness the retirement dream come true as homes that were purchased 20 years ago were delivering on the American Dream. These homes had returned far better than any mutual fund of savings account could have ever done.
Times have certainly changed on two major fronts for most real estate professionals. The first is no secret, real estate prices have been declining. In many markets we can pick the date that prices have declined. For some like us in the Fort Lauderdale Real Estate market we are just about hanging on at the low end of 2004 pricing. In other areas of the country I hear its 2005 - 2006, but there is one thing for sure. The market has declined nationwide making the value conversation with a seller a lot less fun.
The second drastic change is a bit more obscure, but still drastic. The internet and information available on-line has turned most sellers into research junkies. Just like the 80% of home buyers who go to the internet first, so do the sellers. From Realtor.com, Zillow, Trullia and 678,234 (LOL) different realtor websites they can find just about any information they seek. The one piece they simply can’t find without a real estate professional is, “What will a truly qualified buyer pay for MY house?”
With all the graphs, statistics, comparative sales and a professional presentation to hopefully convince the homeowner that their expert opinion of market value is more accurate than what they found on line, the real estate professional will deliver their expertise. Sometimes a minor disagreement may occur.
When all else fails, I like to go back to a fun method which is really very accurate and difficult to dispute. It allows the homeowner to be the true experts, and the real estate professional the chance to provide the data to support their findings. The conversation goes like this, and any homeowner reading this can do this valuation on their own.
Prior to our meeting I am going to print for you the ten most recent sales in your neighborhood, and the ten homes for sale in your neighborhood which are most similar to yours. I am going to leave the prices off, and staple the pages together in order of price. I’m also going to supply you with two sheets of paper with a photograph of your home.
Then I’m going to ask you to do some true, “homework”. I’m going to ask you to first drive by each of the homes for sale, you may need to do this twice, depending how well you know your neighborhood. Taking someone with you usually makes this entire event a little bit more fun, stopping for lunch can also help. After driving the neighborhood you simply will place the sheet with the photograph of your home between the two listings that you feel are the most like your home. Please remember these homes have not sold and are really your competitors.
A bit more driving to do, but this time it is to see the homes that have recently sold. Once again you are going to place the photograph of your home between the two homes that are most similar to yours. It’s important to remember that these are the homes that achieved the same goal you are seeking. They found the market value for their homes and have been sold.
Now comes the fun part. Simply we are going to look at the prices of the two homes on either side of where you placed your home. We will take the average of the two prices. The homes for sale will give as one number and the homes that sold will give us another, creating a range. If you have done the exercise blindly and honestly chances are your home is going to sell, if you bring it to market somewhere in that range.
If you wish to take this one step further find out from your local realtor what percentage off asking prices homes are selling for in your area. This discount needs to be applied to the homes for sale as your upper range being these properties are on the market and have not sold.
This is a good old fashion approach to finding the value of your home. If you think about it for a moment it is the same approach that a buyer will be doing, as they drive from home to home, as they too look for the best value. This is one way they will decide on buying your home.
Once the range is established it sincerely is time to discuss this further with a Realtor. Their insight to market trends will help you to fine tune your pricing and marketing plan, and deliver a successful transaction.
Eric Miller is an award winning Florida Realtor, salesperson and broker. His website Fort Lauderdale Real Estate provides the most complete buyer, seller and investor information for the Fort Lauderdale Real Estate Market.