What should the list price of my home be?
Ask Phyllis: a blog series of frequently asked real estate questions published in the Crescenta Valley Weekly.
Dear Phyllis,
My wife and I refinanced our mortgage last October to obtain a more favorable interest rate. We are now planning a move thanks to an unexpected promotion. At the time, our home was appraised at $1.1m. After consulting with the Realtor who sold us our home, he suggested we list it at $1.25m. I don’t understand how our house could have increased in value so much in this short period.
Celebrating my promotion
Dear Celebrating,
“What should the list price of my home be” is a very common yet complex question. First, home values are rapidly increasing. In addition, appraisers evaluate the homes’ value differently than Realtors.
As a full-time Realtor, I am constantly viewing the interiors of homes. Your appraiser compared your home to others (comps) when he had not personally viewed the interiors of these homes. Because of this, he may be unaware that a 35,000-square-foot lot is sloped and only offers room for a small patio in the backyard. He may be unaware of a poorly laid-out floor plan.
As a Realtor, I work directly with home buyers and know how much a large-level lot is worth to a buyer or how much high-tension lines detract from value. Also, note that the appraiser uses more modest adjustments and may give minimal credit for a $100,000 kitchen remodel versus a $25,000 remodel.
Pricing your home is an art, not a science. Achieving the optimal listing price results from objective research into similar properties and instinct in determining how much a buyer will be willing to pay for your home.
Your appraiser is giving the most consideration to similar sales in your neighborhood. When determining a home’s listing price, I consider active listings and very recent sales. However, when comparing sales, remember that the price was agreed upon approximately 30-45 days before the closing date. Therefore, a listing that closed two months ago was negotiated three or more months ago.
An appraiser cannot determine what a buyer will pay for a home. And ultimately, the selling price is the value. If you think your Realtor has the experience and is competent, I suggest you discuss this with him and trust his instinct. Congratulations on your promotion.
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