Today's volatile real estate market requires sellers to stay on top of economic and market trends. The key concern of most sellers is, how much can I get for my house and how long will it take to sell it? These two concerns interlock: the higher your price, the longer it will take to sell your house. The market value of your home will be validated by an offer from a buyer who wants your house, can afford it and who can get a mortgage to buy it. To get an offer that sticks, you will need to set a reasonable price. That price should be dictated by a home appraisal and current market trends for your neighborhood. Here are top tactics for determining and interpreting those trends: Get a formal appraisal. The buyer's lender will require an appraisal anyway. In today's unpredictable market, many deals are faltering because the agreed-on sale price is much higher than the appraisal. The lender then withdraws support for the mortgage, as the value of the property is not enough to collateralize the loan. The buyer and seller must renegotiate a sale price that the lender will accept. Set your asking price based on the appraisal. When it is time to negotiate with a buyer, the appraisal is the ultimate support for your asking price. Understand that an appraisal will probably include short sales and foreclosures, as appraisers must include all relevant sales in their analysis. Find a qualified appraiser through The Appraisal Institute. Request a Comparative Market Analysis (CMA) from one or more agents. Historically, real estate agents offer CMA's as a marketing tool. The agent reviews recent and pending sales based on data in the multiple listing service and other sources. Then, the agent estimates the value of your house compared to similar recently sold houses in your neighborhood. CMA's often do not include foreclosures or short sales, which may or may not be in the MLS. But, the lender-required appraisal probably will include foreclosures and short sales, which can pull down the estimated market value of your house. The agent might also recommend adding 5% or more to the asking price to help cover the cost of her commission, which may or may not affect the number of potential buyers. An agent also can fill you in on trends in your neighborhood; what types of finishes and amenities are most popular with buyers at the moment; financing trends; and selling tactics. All of these considerations will affect your asking price. Conduct independent research based on public records. Research public records of recently sold homes in your neighborhood to see prices and home improvement trends. Though public records do not include sales in the pipeline ('pending sales'), you can piece together a good idea of current prices and trend lines. Key sources include: • The Orlando Sentinel • You can look up the prior sale price of the home at the Orange County Recorder of Deeds. • With that prior sale price, you can see if the federal government's analysis indicates home value gains and losses through the Housing Financing Agency.
Copyright © 2018, Los Angeles Times