Cost vs Value for your home sale

Don’t be fooled into thinking that there is a relationship between the cost of all of your home improvements over time and the future selling price of your home. Some of the improvements that you may have made are considered maintenance items, for example the new roof or furnace and some of them may have been upgrades such as a new kitchen or family room addition. There is not always a dollar to dollar correspondence between what you paid and what the value of the improvement is.

Understanding the differences in price, cost, and value is really important. It is important to recognize that there is really only one determining factor when selling your home and that is the value that the local market places on your home.

If you have questions ask your Realtor® for the annual Cost vs. Value report provided by the National Association of Realtors (NAR). This is a great article for you to read and it updated each year to keep current with the trends.

Don’t worry about what your neighbor’s home sold for and most importantly don’t even think about what a home sold for in your neighborhood over six months ago. Unless you live in a rural area or have a unique home six months is as far back as a good CMA should go. Make sure you are realistic about the condition of your home and trust in your Realtor. If you interview multiple agents don’t be lured into the thought that the agent who suggests the highest listing price is correct. Make sure you understand why each agent has come to the selling price that they are suggesting.

Also forget going on line and asking for a “drive-by” estimate of your homes value. You need to consultant a full time Realtor® who is familiar with your area who can walk you through all of the facets of a professional CMA. Ask the agent whether they have completed an introductory appraisal course. This is the same course that the appraisers take when they are working towards getting their license. It is valuable training for agents as it walks through all of the same adjustments to value to a property that the appraiser uses when valuing the property for the prospective buyers new loan.

So when you are in the process of establishing a selling price for your home, don't confuse the cost price with the market value. Hire a good REALTOR® to assist you in determining the best price for your home let their marketing expertise guide you through the process.