For Home Sellers                  

How much is my home worth?

What are some typical costs associated with selling a home?

What is the local housing market doing in my area?

How can I find a real estate agent to help sell my home?

Special needs:  Relocation

1031 Exchanges

 

How much is my home worth?                                    

The value of your home while you are living in it is priceless.  But what is your house worth to a potential buyer when you put it on the real estate market?

There are many factors that determine a home's value...  location, size, features, condition, market, etc.  However, the most reliable indicator is the price per square foot of other homes that have sold in the same area within the past six months.

An appraiser will typically compare the subject home to other similar, recently sold homes in the same subdivision ("comparables") in order to judge property value.   Starting with the average price per square foot of the homes most like the subject home, he will then make adjustments (add to or subtract from the price per square foot) based on the condition and features of the subject home as compared to the others.  The adjusted price per square foot will be the actual appraised value of the subject home.                                                          

The true market value of any home is what a prospective buyer is willing to pay - and could be more or less than the appraised value.  However, the appraised value is a very good indicator of market value as it is based on what other buyers actually were willing to pay.  The appraised value also determines how much a lender will loan on a home and could therefore ultimately determine the actual sale price.  In general though, keep in mind that appraised values usually lag market values.

A Comparable Market Assessment (CMA is not an appraisal, but is a great tool to determine a reasonable list price (asking price).  It will give you the average price per square foot of the actual sales price of comparable homes in your area.  The average price per square foot of sold comparables on a CMA will not be adjusted for specific differences, but unless your home is significantly different from the comparables, it should be in the ballpark of your home's market value.                                  

A CMA will also give you the list price and price per square foot of the other active home listings in your area.  This information will help you price your home to be competitive in the marketplace with the other homes that will be competing for the same buyers.

Here are some general rules that may apply to help fine tune your listing price: 

1) The smaller homes in a subdivision will typically appraise for more per square foot than the larger homes, and the larger homes will appraise for less per square foot. 

2) Some features, such as a swimming pool, typically add little to the appraised home value in relation to their actual cost.  This has to do with the desirability / functionality not being the same across a wide spectrum of home buyers.

3) Some improvements that add square footage to a home, such as a game room, additional bedrooms, etc., will typically increase the appraised home value, but may not result in an equal increase in market value if it exceeds the high end price for the neighborhood (aka: overbuilding the neighborhood).

4) Garage conversions will increase the livable square footage of a home and therefore the estimated value based on price per square foot, however, there will be an offsetting deduction for the loss of garage space, which will minimize the net increase in appraised home value - it may also make the home less marketable.

 

What are some typical costs associated with selling a home?

Here is a general idea of some of the costs associated with selling a home (the seller should seek to get more precise numbers for their own situation):

- Deed Preparation (paid at closing).

- Revenue Stamps (usually $1/ $500 of purchase price), paid at closing.

- Recordation of the deed is paid at closing.

- Any unpaid mortgage balance/s is/are paid at closing.

- Any unpaid taxes will be paid at closing.  This may be show up on the closing statement as a credit to buyer if taxes cannot be paid yet (if it’s prior to Sept 1).

- Any Real Estate commissions are paid at closing.

                                       

What is the local housing market doing in my area?

Real estate agents and many home sellers are interested in knowing local housing market conditions.  This might assist a seller in deciding whether or not the time is right to sell their home.

The Realty Times has an excellent summary of local housing market conditions for many parts of the country, and is worth checking out from time to time.

 

How can I find a real estate agent to help sell my home?

You can go a couple of different routes when using the services of a real estate agent.  Some sellers prefer to sell their home by owner, while other sellers prefer to involve a real estate agent in the very beginning of the home selling process.

A real estate agent can help price your home to sell for the maximum amount by doing a Comparable Market Assessment (CMA), as well as give your home maximum exposure through the Multiple Listings Service (MLS), and by networking with other real estate agents.  This offers the potential advantage of being able to sell your home for more money, in a shorter amount of time, and with much less hassle than if you attempt to sell your home by yourself.  Because real estate agents also work with buyers, they are able to bring more qualified prospects to the table, and do all the home showing for you.



Special needs:  Relocation

Relocating can be a stressful time for most people:  not only are you selling a home, you're also changing jobs, and most likely buying a new home.  It's important to plan ahead for your move, and find the right help to make the task easier.

Finding the right real estate agent who specializes in relocation can help to reduce the stress:  these agents are familiar with and can help take care of all the little details involved in a relocation:  it is, after all, what they do for a living. 

Expert help for your relocation


1031 Exchanges

In the summer of 1990, the I.R.S. finally came out with the long awaited rules on Deferred Exchanges.

Section 1.1031 of the Internal Revenue Code laid out in detail the procedure for turning a sale and purchase type transaction into an exchange.

These new rules allowed owners of certain types of like kind Real and Personal property to sell their property and buy other like kind property without paying the Capital Gains Tax.

The like kind provision for Real property is quite broad, and includes Land, Rental, and Business property. Any of which, can be exchanged for the other.