The first question sellers tend to ask is: “how much should I sell my home for?”. When it’s time to sell a home selecting the right asking price can be a challenge. List too low and there may be missed opportunities to capitalize on the sale. List too high and a home can remain on the market for months or longer. Selling a home is much more complicated than most transactions. Homes are unique; finding a point of reference when selecting sales price can be overwhelming. Most homeowners default to their local county appraisal district for answers.
A county appraisal district assesses property value for the purposes of taxation. Each year, the county issues property taxes based on this amount. The appraisal value is public information and available through a local office. While it’s true that many home sellers reach out to their county office as a first resource, the reality is the tax value of a property and what a buyer might pay can be incredibly different. This does not necessarily mean the property is going to be of reduced worth to a buyer (although that is certainly a possibility). What it does mean, is the county and a home buyer view property through two very separate lenses, and each may reveal a very different image.
Establishing the Right Sales Value for a Home
The first step in establishing the right sales value for a home is putting the county appraisal value completely out of your head. The county’s valuation will likely have little to no bearing on the sale. Home sales prices are primarily buyer-driven. A buyer’s perceived value will be affected by more than the county takes in. Market saturation, buyer trends, neighborhood characteristics and more an all affect the price a buyer is willing to pay for a home.Market Saturation. Take a good look at the surrounding area. Sales prices for homes are largely affected by market saturation. As more homes become available in a given market, the competition for attracting buyers increases. Saturation can happen quickly. In a recent example, a Houston family was trying to sell a home Harris County had appraised for $500,000. Months later, the house was still on the market for sale with little buyer interest. Taking a step back, it became apparent that within a ten-block radius, over 300 new-construction homes had been developed – and that was just within the past year. When buyers have more to choose from, sellers often must lower asking prices to stay competitive.
Buyer Trends. Another influence for home sales prices is ‘location, location, location’. A lack of buyer interest in an area means sellers may have difficulty matching the county-assessed value for their home. This can be on both large and small scales. Neighborhood characteristics, school districts, and crime rates can affect buyer interest. At the individual home level, proximity to railroad tracks, busy roadways, and industrial areas can drive buyers toward other options.
Presentation. Looking inside, the interior of a home and how it’s presented can have a dramatic effect on buyer interest. The county assesses property utilizing their own formula. Buyers, however, will be motivated by much more. This can include the overall layout of a home, accompanying appliances, landscape features and much more. Antiquated design, peeled paint, and unsightly fixtures can all have an unwelcome effect on buyer perceived value. The presentation of a home when selling is important, and you can expect buyers will react to it.
