recently SOLD homes and then making adjustments based on the differences, what is happening in the current market, how old those sales were with respect to how much the market is moving or has moved up or down since then etc. Third, there is also no direct dollar-for-dollar correlation between upgrade investment and market price. A $25,000 kitchen renovation will not necessarily bring the market price of a $275,000 home to $300,000; don’t assume you can add that amount to your asking price and get trapped by making your home the nicest, but also priciest, home for your area. Also, you need to be wary of overpricing your home. Overpricing by just 10% over market value will result in 90% fewer prospects coming to see it. You may think asking more for your home than the market suggests will get you better offers but statistics consistently prove otherwise. Many home sellers have an unrealistic price in their mind of what they want to list their home at. Many may have seen price swings both high and low over the years from where they purchased the home at. What a seller paid for a home previously has ZERO influence on what the home is worth today. Just think of what stock can sell for at different times. Another problem occurs when sellers price their home 7% to 10% or more above the market. The biggest problem with this strategy is that if a seller is lucky enough to get a buyer to offer that price and other terms the seller likes and agrees to unless that buyer is paying all cash, they will need to get a mortgage and odds are the home will NOT appraise. This will cause the deal to blow up or allow the buyer to renegotiate based on the appraisal. This has happened quite a bit with the recent multiple offers bidding wars that have sometimes bid prices up so high the homes did not appraise out. As mentioned above, unless the seller gets an all-cash buyer who does not insist on an appraisal, the seller is just looking for problems.
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