As a homeowner, you want to get the best price while selling your home. Irrespective of the condition of the housing market, it’s important to find out the fair market price for your home to deal with instances like stamp duty collection, taxation, insurance claims, loans, sale or purchase, and refinancing. However, firstly you must know your property’s worth to determine the fair market value of your home before taking offers.
The following five steps will show you how to find the fair market value of any property. Once you read through it, you will get to know how to simplify the process and receive profitable offers.
1. Do a Comparative Market Analysis
A Comparative Marketing analysis (CMA) is an estimate of the homes sold in a particular area within six to twelve months. It is widely used by real estate professionals to help home sellers find fair market prices for their properties.
A comparative market analysis report contains the following details:
- The address of similar properties in the area
- List of properties with the same number of bathrooms and bedrooms
- The listed and sold prices of each property
- The contract date, the settled date, and the year in which the property was built
- The total square footage of the properties
- The square footage of each property
You can create a CMA report on your own by evaluating neighborhoods and gathering information about the subject property, or you can simply use online tools to do the same.
2. Check the Market Conditions
Market conditions can affect the value of your property. If there is a seller’s market, you can set high prices. Conversely, in a buyer’s market, buyers will negotiate the prices. It all depends on the market, whether there is a real estate boom or a bust curve.
You must also consider the impact of economic indicators such as the job market and mortgage interest rates.
3. Add value to your home
To start with, you can get your property in presentable shape by cleaning and decluttering your home, washing the windows, fixing any broken mailboxes, removing carpet stains, and updating the fixtures.
You can also offer a transferable home warranty while selling your home. A home warranty provides low-cost repairs and replacements for home systems and appliances. According to research conducted by Service Contract Industry Council, homes with home warranty policies have better market value and sell 16% faster as compared to others.
If you don’t have one, find out the home warranty companies offering services in your area and choose a suitable plan to increase the market value of your home.
4. Opt for a Professional Home Appraisal
A home appraisal is also an estimate of the fair market value of any property. To conduct a home appraisal, you can hire a state-licensed appraiser, who you have to pay anything between $200 to $500.
The factors that a home appraiser will take into consideration to decide a fair market value are:
- The location of the property
- The number of bedrooms, bathrooms, and fireplaces in the property
- The size and square footage of the property lot
- The cost of similar properties in the area within six to twelve months. This approach is similar to CMA
- Whether the basement is included or not
- The finishing details (material used in floors and countertops)
To increase your home’s market value, you can make improvements to the property based on the home appraisal report.
5. Consider the Seasonal Shifts
The real estate market experiences a boom during the summer and spring months. If you are selling your house, May or June is the best time to list. You can even increase the prices as more buyers compete for properties.
While setting a listing price for your home, it is necessary to understand the factors that determine fair market prices for your property. The aforementioned five tips will help you confidently identify well-informed offers for your home in any market.
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