Once you have decided to sell your home by owner, knowing your property’s value is essential in the For Sale By Owner (FSBO) process. Here are three ways to help determine this value.
1. Tax Assessed Value
The tax assessed value can be seen on your property tax statement. It is the amount used by the local government (state, county, city) to calculate annual property taxes. This number may be outdated. In some parts of the country, properties are assessed at less than full value (as low as 70%). Timing of assessments also varies by location (annual, semi-annual, etc.). You can check with your tax assessors to view assessment scheduling.
2. Current Appraised Value
Hire an appraiser to assess your current property value. This might be a good investment (about $400) if you are selling your home FSBO. If you are in a recovering market, it is more difficult to define the current value because there are less recent transactions to compare with. Also, foreclosed homes are not useful. However, appraisers have been trained and certified to account for these issues, and a licensed appraiser will be able to make an accurate judgment, thus pricing your home right.
3. True Market Value
The true market value is measured by the amount a party is willing to pay today for your property. A comparative market analysis (CMA) from a real estate professional is a way to get an accurate representation of the current value of your home. Most real estate professionals are willing to do this for free. “I always offer this as a free service. I have specialized access to that information, and I’m happy to help when I can. I look at it as an opportunity to make another connection— that person may not need my help, but he may have friends that do,” says Rhonda Taylor of Century 21 Realty.
Should FSBO Sellers Set a List Price Above Property Value?
It is commonplace for FSBO sellers to set a list price high to allow room for negotiating. Experienced real estate agents and savvy sellers know this is futile. Savvy FSBO sellers know that competitive pricing is the way to close deals. If there is interest in your property, you should expect someone to match your asking price. Therefore, price accordingly. Later on, you can negotiate for a higher price if the situation lends itself to that.
Food For Thought
1. The tax assessed value can be seen on your property tax statement. How would having an outdated tax assessed value affect you today?
2. An appraiser is a home value professional. List examples of times when having appraisal documentation can be beneficial during the selling process.
3. The true market value is measured is the dollar amount someone is willing to buy your home today. If an offer cannot get financing, is it’s value a true market offer?
4. It is commonplace for sellers to list high to allow for room to negotiate. Why is this not recommended?