Whether you’re considering a sale or not, knowing your home’s worth is a way to maximize its potential for profitability. A skilled real estate agent can help you with these calculations, but it’s helpful if you have some knowledge about the home value and an idea of what has sold for in your neighbourhood recently so that you know what ballpark figure to start with. Here are some ways you can value your home for sale.
1. The Comparable Market Analysis
A CMA is one of the best ways to value a home for sale. This figure is the average price of homes sold in your neighbourhood within the last six months. To begin, you need to get a copy of the latest CMA for your neighbourhood. You can request this from your real estate agent, or you can access HDB Resale Flat Prices online.
2. Local Area Real Estate Data
Depending on where you live, and the time of year, it cannot be easy to get comparable market data. However, if you have a real estate agent, it shouldn’t be too hard to find the average sales price for homes sold within your neighbourhood within the last six months.
3. Your Home’s Value According to Loan Officer
In most cases, your real estate agent will ask you what your home is worth. The way to value your home for sale is to make sure that the number you come up with is realistic. If you ask for a high price, you are likely to undersell and if you ask for a low price, then the chances are your home won’t sell for as much as possible.
4. SRX Home Value Tool
A great tool to use when trying to value your home is SRX X-Value Pricing. It is a property website with a wealth of information about listing prices for homes in the area. You can see data on previous sales, how many bedrooms the home has, what year it got built and so on. A good real estate agent will have even more comprehensive info as they subscribe to this website.
5. The Cost Approach
The cost approach is the following method to value your home. It measures your home’s replacement cost versus its market value. Replacement cost is the cost of buying replacement parts, labour and other accessories to make your home exactly like the one getting sold. You should also include the cost of redoing work that needs to be done on your house before you move out.
6. Owner’s Equity
The owner’s equity method measures a home’s market value based on how much equity is in the homeowner’s ownership. It does not include any debts or mortgages. Equity can significantly determine your home’s price to ensure you don’t go under or overvalue it. However, it would be best if you were carefully using this method because this calculation takes time and is not completely accurate.
7. The Bottom Line
You must know what your home would sell for before you put it on the market. It will help you to know whether or not you are under or overvaluing your house. If your home is worth more than you’re asking for, then you’re taking a risk by not home pricing it higher. On the other hand, if you sell your home for less than its actual value, you won’t get as much money as you’d like.
8. Cost Approach with a Profit Factor
Another method to value your home for sale is with a profit factor based on the present worth of what your home would be worth after all debts and expenses get paid off. This figure is usually the highest value for your home.
There are many ways to value your home for sale. Make sure you know which method works best for your home because if you make a mistake, it could cost you thousands of missed profits. If you need help valuing your home for sale, contact me! I’d love to help you.