Are you considering selling your Los Angeles home? If you are, it is important to establish value of your Newport Beach property. There are several manners to determine value of your home.
Comparative Market Analysis
One of the most important starting points is to talk to a professional Realtor®. A Realtor® will look at recent sales in the area with homes that are comparable to your home. A Realtor® will consider condition, location, size of home, and will prepare a comparative market analysis – CMA. A comparative market analysis may include similar properties that are active, pending/back up properties, and recent closed or sold properties. The Realtor® may go back four to six months on recent solds on recent sold properties in your area. Sometimes, it is necessary to go back further if there have not been any recent sales.
An important consideration with sold properties is how recently they sold. Per the Residential Purchase Agreement, the property has to appraise for the sales price (providing that is an agreed upon item in the purchase agreement). If it is a cash deal, and the appraisal can be a negotiated item on the Residential Purchase Agreement, and may not be a factor in the purchase. The appraisal contingency may be negotiated at the time an offer has been presented.
Typically, when a Realtor® prepares a CMA for a seller, they will go back 4-6 months when reviewing sales.
Another way in which to determine the value of your Los Angeles home for sale is to have the property appraised by an independent appraiser. Appraisers will charge a fee for an appraisal, and this may be a consideration if the Seller wants additional validation of the value of the home. An appraisal will cost the seller approximately $350.00.
As I stated earlier, the property must appraise for the sales price on the Residential Purchase Agreement. However, the appraisal contingency is a negotiated item at the time an offer is being negotiated.
There are many internet sites that a consumer may utilize to establish value of their home. The internet estimates may or may not be accurate, and take into consideration any upgrades that have been done to the property, condition and location. I recommend consulting a professional Realtor® to prepare a Comparative Market Analysis for your property.
The value of your property is worth exactly what someone is willing to pay for it, and what you as a seller are willing to accept for it at a particular time. The market is the market. If a home is over priced it will sit on the market. If a property has been under priced, then you are risking not realizing the actual dollar amount the property is worth. Pricing a home to sell should be based upon the actual comparable sold properties. If it is priced at market value, then it is possible to have a multiple offer situation, and selling in a timely manner.
If a property has been overpriced, and it sits on the market, you may consider a price adjustment to reflect the current value of the home.
Chasing the market down is an extremely important consideration. Pricing your home high or to “test” the market to see if you get that amount is not a good idea. When a home is over priced, it will sit on the market accumulating days on market. And if there is a price reduction, however still slightly above the market, you can end up chasing the market down.
When a property sits on the market because it has been overpriced, the buyer’s assumption is – what is wrong with it and why hasn’t it sold? Pricing a house too high handicaps it right from the beginning.