When setting a price, the important thing is to be realistic. If the price is too high, you may not find a buyer. Too low, and you cheat yourself out of money.
Regardless of what you originally paid for your home and the cost of improvements you have made, the only price that matters is what the market will bear at the time you decide to sell. You may consider hiring an independent real estate appraiser with specialized training and experience. Don’t rely on assessed valuations made for tax purposes. Such valuations may not be reliable indicators of value, as they are usually made using mass appraisal techniques.
Comparative market analysis
Whether or not you get an appraisal, your REALTOR® can develop a comparative market analysis. This analysis will describe homes in your area that have recently withdrawn from the market and may compare specific features of your home to others–the value of a corner lot, a city view, or an extra bedroom, for example. The analysis may also point out market fluctuations caused by the opening of a new school or business, as well as long-term trends.
Once you’ve decided on a price range, the REALTOR® can help you calculate an estimated amount you might net from the sale. If you have owned your home for several years, you may have built up sizable equity. Equity is the difference between the value of your home and the balance on your mortgage. After subtracting what you owe on your mortgage, ask your REALTOR® what costs you will incur in closing. These may include title fees, taxes, a penalty for prepaying your mortgage, brokerage commission, attorney fees, and charges for preparing and recording documents. Finally, ask your tax adviser or attorney about the tax implications of your proposed sale.