Woodstock GA Real Estate Happenings…

March 4, 2008

Determining List Price & Market Value in Georgia

Georgia Homeowners!  Do you understand how your home’s market value is determined?  Realtors/Appraisers will look for properties in your neighborhood that are comparable to yours that have sold within the last year.  There are lots of general factors that are considered such as:

  • bedroom count
  • bathroom count
  • style (1 story, 2 story, split level or split foyer)
  • garage; drive under, kitchen level, 1 car, 2 car, 3 car
  • basement, is it finished?
  • does the basement have a bedroom/bathroom, 2nd kitchen?
  • lot size/topography
  • approximate square footage
  • sales price
  • days on market
  • pool; in-ground, above ground
  • lake view and/or lake frontage
  • mountain views
  • golf course lot/view

The following is with regard to the resale of older homes, which is what I have had the most questions about within the last couple of years. Feel free to comment or ask me questions if your circumstances differ or if you need additional information with regard to the type/age of homes I mention here.

A big factor considered is market condition.  Does your home conform to the condition of the homes that have sold within your community?  Perhaps the only homes in your neighborhood that have sold within the last year are the same floor plan as yours, were built in 1988 just like yours, they have finished basements just like yours, however the owner’s updated their kitchens, new appliances, new double paned windows, installed new granite counter tops, hardwood floors throughout, new paint throughout, new roof, new gutters, new HVAC, updated the master bath, new exterior paint – but your home looks exactly how it did when you purchased it in the late 80’s. This would be a good indication that your home is not in market condition and would not sell for nor appraise as high as the aforementioned homes. 

Let’s say that the homes that sold within the last year in your community hadn’t been updated and were in the same condition as yours; your home would be in “market condition” and should sell/appraise at current market value which is established by the aforementioned homes!

The other side of this is “over improvement”!  You need to find a great Realtor to advise you as to what would be over improving for your neighborhood.  Granite counter-tops for instance! Gorgeous! Everybody I have talked to seems to want them, however they are very costly.  This may make your home more appealing to Buyer’s however, will you get out of them what you paid?  Talk to your Realtor!  This would differ with new construction with granite being typical for the neighborhood.  It could hurt your resale not to have them since your competition would.

Find out what will make your home sell faster with the highest return and what improvements will end up costing your more than your return.  Base your updating choices on the results. 

Don’t OVERPRICE!  Very important! There’s a difference between giving yourself some negotiating room and overpricing your home! I definitely recommend having some room to negotiate!  Were you aware that the majority of your showings will come from agents who found your home for their Buyer(s) in MLS?  When I work with Buyer’s, I show them neighborhood sales that closed within the last year.  We will compare these homes/sales to the homes that my client wants to see. This is typical practice for Buyer’s Agents. (You should receive a CMA (comparative/competative market analysis) from Listing Agents whom you interview to list your home. This will most likely have the same “comps” a Buyer’s Agent uses to help her Buyer determine what to offer for your home.) Also, something to consider is your photos in MLS and FMLS!  If a buyer sees that other homes in your community appear to be better maintained, more updated and your price is comparable to those and appears to be dated – you might lose Buyer activity since the Buyer’s might feel that your home is overpriced based on the photos of the comparable listings.  Your Realtor/Listing Agent should show you active listings in your community (within interior photos and sometimes virtual tours) to give you insight into your competition, which gives you a good idea of improvements or changes you need to make to your home or  how to adjust your list price.  When interviewing listing agents, ask them if they have previewed competing properties.  This is important when establishing market condition and if the home is truly comparable to yours.  I,  personally tour comparable homes prior to our consultation so as to give you an educated opinion of your market condition and market value.  Remember: Buyers may decide that they do not want to see a home that appears dated or unkempt if your interior photos show that your home is dated, but your price is the same as the comps of the homes which were updated!  However if your home was priced to reflect it’s needs, agents as well as Buyers may see your home as a “find” (a diamond in the rough) and you may have more activity than you can handle and you may get lots of offers! 

My recommendation to you is this; take a look at the comps your Realtor presented to you for your neighborhood. Get estimates for making the changes that were made to the comparable properties, calculate this considering your payoff, fees associated with selling your home combined with the estimated market value of the comparable properties provided by your Realtor.  This will let you know if  your return will be worth the time, energy and expense to make the changes.  Your Realtor will be happy to help you with this.  Keep in mind that updated, freshly (neutral) painted, well maintained homes with good curb appeal show and sell much faster for better return than homes that look like they need TLC.  If you do decide that it is in your best interest to sell your home without making the aforementioned changes (or if your home doesn’t need these changes), I can give you some helpful hints to make your hope look it’s best, make it more appealing to buyers, appear to be more updated, and we can adjust your sales price based on it’s remaining differences from the comparable properties. However, there are Buyers out there who would rather buy a home for less money and fix it up the way they want it!  My experience with this has been that these buyers will typically try to get you to come off your already adjusted price as much as they can just because the repairs/replacements seem so overwhelming. The opposite of this situation is an important factor as well.  If the homes that have sold in your community have not been “rehabbed’ you want to be careful not to “over improve” because you want to be able to get a return for your improvements.  Please talk to your Realtor before making big (expensive) changes to your home so he/she can advise you as to what is in your best interest.  It is completely up to you as to how we will market your home. I am here to help you decide what best suits YOUR needs!

Determining your home’s market value is an important part of SELLING your home, just as using neutral paint colors, remembering that you are trying to entice a high volume of Buyer’s, not just people with your decorating taste. FIND THE RIGHT REALTOR who will be honest with you about your value and your home’s condition, will recommend changes to attract a wide range of buyers and who doesn’t just tell you what you want to hear. Make sure that he/she is knowledgeable in YOUR market area and has an awesome plan for marketing your home getting it the most exposure possible.

Life is Good!
Kindest Regards, Michelle Miller, Realtor (404.538.5396)
michellemiller1@remax.net
http://www.bestgahomes4sale.com/

Service Areas: Acworth, Alpharetta, Ball Ground, Cartersville, Canton, Dallas, Euharlee, Hiram, Holly Springs, Kennesaw, Marietta, Milton, Powder Springs, Vinings, Waleska, White, Woodstock.

RE/MAX Town & Country (770.928.4966)

*Each office individually owned & operated. *Equal housing opportunity.

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