What Should The List Price Of My Home Be?
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 is suggesting that we list at $1.25m. I don’t understand how our home could have increased in value so much in this short period of time.
Celebrating my promotion
“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 home’s 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 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 is the result of both 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 most consideration to similar sales in your neighborhood. When I am determining the listing price of a home, I consider active listings and very recent sales. However, when comparing sales keep in mind 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.
Quite simply, an appraiser is unable to determine what a buyer will pay for a home. And ultimately the selling price is the value. If you think your Realtor has experience and is competent, I suggest you discuss this with him and trust his instinct.
Congratulations on your promotion.