Susan Ormont - RISK VERSUS REWARD: A SIMPLE GUIDE FOR INVESTING IN REAL ESTATE

your home’s value.

When selecting comparable properties, avoid considering distressed properties —foreclosures, short sales, and ugly homes. These bargain properties often sell at a 5% to 10% discount and aren’t good indicators of your home’s worth.

2. Think About Market Trends

When you look at comparable prices, you should also glance at how many days a property stayed on the market before a sale. You want your home to sell quickly, not eventually. And “days on market” can indicate whether your local market is hot (or not). If nearby homes are disappearing overnight, then you’re in a seller’s market that could justify an optimistic price. If houses are taking months to sell, then you’re likely in a buyer’s market and setting a price slightly below your competition could give you a big advantage.

3. Consider Online Listing Services

Online sites, like Zillow and Realtor.com, create algorithms that essentially gather data from past, comparable sales and derive a “guesstimate” for your house. This is a ballpark number that merely crunches numbers. Zillow doesn’t know how your house will show or that your bathroom tile is to die for — details that will affect the value of your home. This is why online estimates should be one more factor to consider, not the last word on price.

4. Hire an Appraiser

If you’re stumped on what your home is worth, throw some money at the problem and hire an appraiser. For less than $500, an appraiser will view your property, pull comparables, take

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