How to Know If You’re Under-Valuing Your Home
If you’re anything like me, you’re constantly being told not to sell yourself short. When it comes to putting a house on the market, though, that’s especially good (and literal) advice. Buying a home is a major investment; when it comes time to sell, that’s your chance to reap your reward.
While overpricing your property is a good way of not making a sale at all, underpricing can be just as bad, leaving you with little to show for all your years of homeownership.
The Proceeds from its Sale Won’t Cover What You Paid
One of the biggest and most obvious tip-offs that your home is undervalued is that, if you were to sell it today, the money you received wouldn’t be able to cover the price you originally paid for it. Sure, the ups and downs of the real estate market sometimes answer the question “What is my home worth?” tricky, but unless your property is in disrepair or located in a particularly problematic area, your home should increase value over time, not decrease.
Other Houses in the Area Are Priced Higher & Still Selling
While our parents were always quick to remind us that following the crowd wasn’t always a recipe for success, when it comes to putting your house on the market, it can sometimes come in handy. Before you settle on your asking price, consider what other comparable properties in the local neighborhood are priced at. If they’re priced higher than the number you’re thinking about and still selling, then there’s no reason to think you can’t sell yours for the same amount.
You’re Not Taking into Account Renovations You Made
One of the easiest pitfalls to stumble into when pricing your home is failing to consider any additions or renovations you’ve made over the years that have added value. Larger home improvement projects, such as bathroom or kitchen remodels, swimming pools, decks, or garage construction can often pay for themselves several times over. Even smaller projects, like roof repairs, window replacements, or adding a front porch light can add value.
The Real Estate Agent is Pushing You to Price it Higher
If your real estate agent is pestering you to raise your home’s asking price, you might cynically assume they’re just doing it to increase their commission fee. You might be right. But a good real estate agent knows that overpricing is a surefire recipe for not making any commission fee at all, so they wouldn’t risk blowing a sale by getting greedy. The truth is, if your agent is telling you your house is worth more than you’re asking, that’s probably because it is.