Pricing your home for sale is anything but an exact science. You can interview three different real estate agents and get three different opinions. This is due in large part to an inconsistent opinion of the facts for neighboring sales. It is important to price your home accurately so that you receive a fair price.
Determine your home's assessed value ratio. In other words, how does your home’s assessed value compare to the homes in your neighborhood or on your street that recently sold? In order to determine this ratio, gather the most recent sales information of homes sold in your area. It is crucial to only use those homes that actually sold and also the most recent sales not to exceed a maximum of the last 120 to 180 days. Depending on the amount of sales, it is recommended that the list be narrowed down to the three or four most recent sales that are nearest to the subject property. In some areas, school system boundaries should be adhered to.
Do the same simple math problems for the sold prices of the homes, and the assessed values of the sold homes. Take the asking prices of the homes that sold, add them together and divide by the number of homes, thus giving you the average asking price of the sold homes. For the right price on your home, divide the average sales price by the average assessed value, thus giving you the ratio of the assessed value to the asking price for similar sales in your neighborhood. Then, take the average sold price divided by the average assessed value to determine the ratio of the assessed value to the sales price for sold homes in your area.
Accurately predict the assessed value of your home based on actual home sales in your area by applying the formula. For example, if the asking ratio equals 2.35…sold ratio 2.25…seller’s assessed value $114,850. This homeowner should expect to receive between $258,412 (2.25 times assessed value) and $ 269,897 (2.35 x assessed value). Assessed value will always be more accurate than appraised value, insurance value or price per square foot, as these are all based upon speculation.
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