How Much Is Your Home Worth Now?
You have location, location, location. Now, here’s how to beat the odds as a seller in a buyer’s market. Online Only.
First thing’s first: Determine the going price for your house — which is a cinch these days with so many online services that calculate based on, well, location, location, location. So let’s start with finding that number. Here are a few Web sites that will help you determine a starting place (fair warning: Some of these sites offer a free service; others charge):
These and many similar sites will first ask for your address and ZIP code and then to fill in variables such as home type (single family, condo, country club, etc.), square footage, number of bedrooms and bathrooms, and other quantitative information.
The sites will then look for comparable properties, or “comps” — key indicators to help determine the value of a house. (Appraisers use these numbers to justify values.) An appraisal — also required for refinancing — has a life of only four to six months, because market and economic conditions continually change.
Several other variables — especially the location and amenities — factor into house value. For example, Cathedral City is undergoing an image makeover that could positively affect prices of its houses.
Homeowner association and Indian land-lease fees also factor into desert home values. In some communities, you can pay $1,000 in monthly fees in addition to your mortgage payment.
Which is why you should think about amenities and upgrades. Pools, spas, and exceptional landscaping affect house values and may significantly impact their worth. A newly renovated kitchen, new window coverings and carpeting, optimal light exposure, prime views, and top-grade exterior façade materials will usually enhance the value.
The Web site www.electronicappraiser.com offers these 10 tips for sellers:
1. Get pre-approved for a home loan and research the housing market where you wish to live so that you know how much you need to buy a replacement.
2. Check your mortgage payoff on your current home.
3. Determine how much your house is fair market value by asking a real estate agent. (You can also order an appraisal.)
4. Estimate your costs to sell. Factor in the real estate agent’s commission (if you use an agent); advertising costs (including signs and fees if sell by owner); attorney, closing agent, and other professional fees; excise tax; prorated costs for your share of annual expenses, such as property taxes and HOA fees; and standard seller fees paid (surveys, inspections, etc.). Real estate agents can estimate these costs for you.
5. Estimate costs to buy a new house. Calculate moving expenses, loan costs, down payment, inspections, title work and title policy, and a new hazard insurance policy. Your lender should disclose estimated costs when you apply for loan pre-approval.
6. Calculate estimated proceeds by deducting your mortgage payoff from the fair market value of your current house. From the balance, deduct your seller costs to get the proceeds you will receive at closing. “Will your closing proceeds cover your costs to buy a new home?” the Web site asks. “If not, do you have cash or other funding to make up the difference?”
7. Make necessary repairs unless you want the house to be regarded as a fixer-upper.
8. Prepare the house to show. See the May 2007 issue of Palm Springs Life for expert tips on home staging.
9. Let people in. A real estate agent will ask you to leave when the house is shown because buyers often feel uncomfortable inspecting the house if they feel they are intruding in your personal space.
10. Make the house accessible. It should always be ready to show. Many agents won't bother showing a house that takes 24 hours to get into.
As we move to an era of slower house price growth, long-term thinking will become critical. Look at the potential to add value through home improvements. But the key to adding value comes is expanding usable space rather than making cosmetic changes.