What is the True Value of Your Home?
What is the True Value of Your Home?
Have you ever thought about the true value of your home? Periodically we get calls from homeowners inquiring about selling their home via an auction or traditional listing. Before we conduct our due diligence, we normally ask the homeowner what he/she thinks is the true value of their home. We get a variety of answers.
Most of the answers we have heard before. For example, "We paid X number of dollars for it X number of years ago. Based upon inflation, it's got to be worth X dollars." Or, the home down the road sold for X dollars about a month ago and our home is bigger and nicer than that one."
Or, "We went to http://www.trulia.com/ and the site told us the value of the home is X dollars." The best one I heard was that my brother-in-law said it was worth so and so and "we should not take a dime less."
Let's go back to the original question, "What is the true value of your home?" Before we answer that question, I am sure most of you have heard that the three most important things about real estate is: location, location, and location. While this is true in part, we must go deeper. There are many variables that determine the true value of a home. While a certified appraisal is great for the banks in making a loan, in many cases it falls short of what the true value is.
Even with real estate, "beauty is in the eye of the beholder." I have read about and have seen property sell for more than what was expected because the property was previously owned by the buyer's relative, friend, or perhaps, as a child, the buyer lived in the home and it had "sentimental value." Your normal buyer would not be able to compete under these conditions.
I know several investors that will look at a property and determine what the cost would be to update the home. Perhaps the kitchen and bathrooms need remodeling. Perhaps it needs painting inside and out. The carpets may need changing out, and landscaping may be needed. After determining all these costs, and their profit margin they want to make upon resale of the home, they will calculate the maximum dollar they would pay for the home in its current condition. In many cases, the homeowner doesn't think the home needs updating or understands the labor and material cost to update or remodel the home.
There is a home not far from where I live that has been on the market for over a year. Structurally, the home is OK but needs major cosmetic repairs and updating as it was built in the 1950's. The price has dropped almost 25% since its original listing and still hasn't sold. There are thousands of houses out there just like this one. Someone didn't do their homework in determining its true value.
Even with companies like Trulia, you just can't depend on this information as being accurate. A lot of information for these web sites come from court house records. You can't even trust tax assessments. As a homeowner, you want the assessment low. As a seller, you want it high. The problem is that you can't have it both ways.
What is the true value of your home? The market, viz., buyers, will determine that value, via an offer. With a traditional listing, the realtor starts out high then over time, reduces the price until someone sees its value at that reduced price.
With an auction, we start out low in price and move up. When the last bidder stops bidding, market price has been determined. Typically, we can get the home sold in 30 to 45 days from signing an auction agreement, not six months or more down the road as with a traditional listing.
For all your real estate and auction needs, give us a call or visit or our website at http://www.cansellnow.com or call us at 252-257-4822. Although located in Warrenton, about an hour north of Raleigh, we conduct business throughout the state of North Carolina. Our main focus has been the Raleigh-Durham-Chapel Hill-Wake Forest and eastern North Carolina.
Forest area and eastern part of North Carolina.