If you are considering selling your home in Newport Beach, it is important to establish value of your property. There are several ways in which to determine value of your home.
1. 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 location, condition, size of home, and will do a CMA and present it to you as the seller. A CMA is a comparative market analysis of similar properties that are active or currently on the market, pending/back up properties - properties which are pending close of escrow, and recent closed or sold properties. With regards to sold properties, an important consideration is how recently they sold. A property has to appraise per the Residential Purchase Agreement, and an appraiser is not going to go back a year for comparables. Typically, when a Realtor does a CMA for a seller, they will go back 4-6 months when reviewing sales.
2. Appraisals
Another manner in which to determine value of your Newport Beach home for sale is to have the property appraised by an independent appraiser. There is a fee for this to the Seller to have the property appraised, however this is a valid 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 has to appraise for the sales price. There is an appraisal contingency in the Residential Purchase Agreement which stipulates the property has to appraise for the sales price in order for a loan to be secured on the property.
Internet Estimates
There are many internet sites that a consumer can visit in order to establish value of their home. A consideration with utilizing these sites is that they may not be very accurate. Some of these sites such as Zillow will attempt to offer some type of comparables, however they may not be very accurate with the price of your home. I would recommend consulting a professional Realtor who works in the area to do a Comparative Market Analysis. This is a service that I offer at no charge to my clients. Please contact me if you are considering the value of your home.
4. Market Value
Your home is worth exactly what someone is willing to pay for it, and what you are willing to accept for it at a particular time. The market is the market, and if a home is over priced it will sit on the market. If it has been under priced, then you are risking not realizing the actual dollar amount the property is worth.
You don’t want to chase the market!!
Chasing the market down is an extremely important consideration. Pricing your home high or to “test” the market just 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 for too long, the assumption is – what is wrong with it? Why hasn’t it sold? Pricing a house too high handicaps it right from the beginning.
If I can answer any questions about determining the value of your Newport Beach home, please contact me.
