You
can remodel the kitchen, add on a bedroom, knock down a wall
and change almost anything about a house with some tools or
a paint brush ... everything, that is, but the location.
When determining value in real estate, location
is the single greatest factor. It’s what drives the
price.
A mediocre home on the beach can have a higher
value than a great home on the same street off the beach.
Consequently, location can have a negative
effect on price.
There is an added benefit of owning in a
good location. At some point when prices adjust, the places
in the best locations will tend to adjust the least. In a
seller’s market, with inventory low, it’s tempting
to start playing the “I’d sell my home if I could
get ...” game.
And while prices may seem to be escalating
at an unrealistic rate, a list price still should be within
some realistic parameters.
The most accurate method to measure a home’s
value is with a Comparative Market Analysis (CMA). Realtors
and appraisers use this approach which basically compares
your home to a minimum of three similar homes which recently
sold in your neighborhood.
According to an example provided by the Honolulu
Board of Realtors, if three homes similar to yours sold for
$276,000, $279,000 and $278,500, and you wanted to sell yours
for $285,000, there would have to be a legitimate reason why
your home was worth the additional $6,000. Perhaps yours has
an extra bathroom, a larger lot or a new roof.
Appraisers have adjustments to assign a dollar
amount for an extra bedroom, extra bath, a remodeled kitchen,
a swimming pool and just about any feature that makes it different.
There are even adjustments for views, parking stalls and virtually
anything that might increase or decrease value.
If your home has additional features, you
can reasonably expect to get more for your home. But it’s
prudent to listen to the recommendations of your real estate
professional.
They know that listings are the hottest when
they are new, and stale listings with price reductions may
tell the prospective buyer that something is wrong with the
property.
While you always have the option of dropping
your price, pricing it right from the beginning may give you
the best opportunity to market your property while it still
has some sizzle, and may actually get you the best price.
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