How Much Is Your Atlanta Home Really Worth? Part One
How Much Is Your Atlanta Home Really Worth?
Are you wondering how much your Atlanta home is really worth? There is quite a difference between the emotional value of a home and the economic value of a house. The word “home” has connotations of family holiday celebrations, family memories, safety, and security. The word “house” implies value, investment, and appreciation.
In reality, a home is a house, and vice versa. And, there is no problem with blurring the lines between the two until you get ready to sell. Once you do choose to sell, the two values can start to conflict. Then, you have to step back and start thinking of your home as a house.
FREE MARKET ANALYSIS of Your Atlanta Georgia Home
Because we offer a free Market Analysis of your home as part of the English Team service commitment, I have met with hundreds of families who were considering the sale of their home. Many of these families were being forced to sell because of a job change, divorce, failing heath, or other unforeseen change in economic circumstances. At present many are facing adverse economic circumstances because of job loss combined with unfortunate mortgage commitments.
Because of the stress and anxiety attached to their situations, these families have a great need to get the highest amount possible from the sale of their home. These circumstances usually lead them to latch onto any information with a positive effect on the market value of their home. Likewise, they tend to completely ignore information that might have a negative impact on the value.
Delimma of Pricing a Home Above Predicted Market Value
Herein lays the dilemma for real estate agents: Should I agree to list the home for an amount higher than the market analysis predicts the property will yield? Or, should I be honest and open with the sellers and make a realistic prediction of the property’s sales price?
I always opt for the latter. In addition to the ethical issues involved for me as a Realtor, there are two good business reasons not to over valuate a home you are putting on the market:
- Putting an overvalued list price on the home virtually guarantees that the home will take much longer than average to sell.
- If the list price on the home is inflated, the home will eventually sell for less than the Market Analysis predicts it should have.
How Can We Predict the Market Value of Your Home?
So, how can you predict the market value of your home? I would suggest you first consider what elements should be disregarded when predicting the market value:
- The market value of your home is not a function of what you have invested in the home. Just as the price of a share of stock fluctuates up and down every day on the New York Stock Exchange, so too does the value of your home in the local marketplace.
- It does not matter what price you paid for the home. It does not matter what you have invested in remodeling or improving the home. In the end, the marketplace determines the value of your home.
- Sadly, it is not unheard of for homes to sell for less than the sum of the purchase price plus improvements. We are seeing this over and over in the current economic cycle.
- The market value is not a function of what you need out of the house. I can’t tell you how many times people have told me that they have to price their home at a certain level because they want “x” amount of dollars from the sale of their current home to purchase a new house. Unfortunately, it just doesn’t work that way. The buyer doesn’t care how much money you need from the sale of your home and has made his decision independently of your need to purchase a replacement home.
- Likewise, the market value of your home is in no way connected to the price of homes where you are moving. Houses cost more in the Northeast and California, but this will in no way impact the price your home sells for in the Atlanta market.
Finally, the market valuation of a home is in no way connected to the memories and experiences you have had in the home. Most homes would be priceless if this were true.
Most folks already know what factors go in to the market valuation of their home. However, when it’s time to actually think about selling, emotions have a tendency to override rational thought and block out the things we don’t want to think about.
Appraisals Have An Expiration Date
One common argument for overpricing a home is the existence of an appraisal that says the home is worth a certain amount of dollars. Sellers completely ignore the fact that the appraisal was done for a specific reason at a specific time and reflects the value of a home a specific point in time. Remember: appraisals reflect the purpose for which they were initiated. If you have an appraisal from a lender, you have not been given the market price of your home; you have been given the upper limit of the lender’s willingness to loan you money. In particular, lenders have been overly generous in valuing homes for the purpose of making equity lines of credit. We are seeing the consequences of that decision in today’s foreclosure rate.
Follow us in our next post: How Much is Your Atlanta Home Really Worth? Part Two: we look at appraisals. and in our conclusing post: How Much is Your Atlanta Home Really Worth? Part Three we look at the nitty gritty of pricing your home for the market.
SALLY ENGLISH AND THE ENGLISH TEAM
Sally English and The English Team specialize in homes and neighborhoods convenient to Emory University and The Centers For Disease Control. Wer often answer the question of how much is your home really worth with Free Market Analysis of Your Home as part of our commitment to service excellence. Our Comparative Market Analysis, CMA for short, will help you price your home for sale in the Atlanta Georgia housing market. Call us at 770-939-3174,