Alex and I recently received an email from a former client. He’s considering selling his home and, like many home sellers do, he went online to see if he could figure out how much the home is worth.
“The online resource values my home at $325,000,” he writes. “Yet, one of my neighbors recently sold his home, which is almost identical to mine, for $365,000.”
He went on to say that he is quite confused about the home-pricing process and wondered if we could help him out.
First, the online real estate portals offer only “estimates” of a home’s value. Because these protals do not have the detailed information on your property, the estmate will be pretty far off. And many of these portals do NOT know the Guam market, for sure! They don’t know the difference between a good neighborhood and a sketchy one. Zillow or any online home value calculator have never seen your home or any other home on Guam for which they can determine an estimate, so they are rarely ever correct.
It’s all about Market Value!!!
One thing our former client got right was that he understood that the price he sets for the home should reflect its current market value.
The only way to know the current market value – what a willing buyer is will pay for silmilar home – is by figuring out what other buyers have paid for comparable homes ON GUAM in the recent past.
This means we need to look at sales prices of homes that closely match the one you want to sell. And, there’s more that goes into determining if a home is similar to yours than meets the eye. We look at the same criteria that professional appraisers do.
- The age of the home:
Sold homes that are within three years (either side) of the age of your home. If not, then we expand to five year, seven years and ten years, if we have to.
- The size of the home:
The sold homes’ square footage is considered together with the number of bedrooms and bathrooms that also factor in when determining market value.
- The home’s location:
We try to find sold homes in close proximity to the subject property, but will consider a wider range, if necessary. If your home is in Yona and we can’t find other homes similar in the same village, or the neighboring Santa Rita or Agat, then we look at Yigo. Why? Because Yigo also offers big open space and is close to a base. The location within your particular neighborhood or village may also impact its market value.
- Upgrades, amenities and condition: We’ll compare your home to the sold homes with an eye toward any upgrades performed, whether similar amenities are offered and, most important, how the condition of the homes compare.
- How long ago did the similar homes sell?: If we can’t find homes that sold in the last 30 days, we go back further 60 to 90 days.
Next, we’ll do the number crunching to determine if your home is worth more or less than the sold homes.
What will the appraiser say? He or she, after all, has the final say on how much your home is worth in today’s market. No lender is going to approve a loan for more than what the appraiser says the property is worth. And VA lenders are very strict when it comes to homes that appraise for lower than the selling price.
This is why a GREAT Realtor is thorough in the determination of the appropriate price for your home. An inaccurate evaluation on the agent’s part can lead to a failed real estate transaction, just when you thought it was a done deal.
The appraiser will visit your home to perform an inspection. He or she may or may not take photos while in the home. The appraiser will certainly consider the home’s landscaping, “location, structure and even appliances,” according to the pros at LexurAppraisal.com.
The inspection process can take “anywhere from 20 minutes to 4 hours depending on the size and details of the property,” according to Rachel Guthrie at GoHomeside.com.
If you hire an experienced and knowledgeable agent, the suggested list price should match or come very close to the appraised value of the home. This is why it is so important to find the right agent for the important task of selling your home. Does the agent know the market? Does the agent look at the market statistics on a regular basis?
That is why I do a Market Housing Review for home sold on the Facebook Page every week to keep Sellers up to date with how much and how fast Buyers are buying.
We invite you to contact and interview us to know that we, at Living On Guam Realty, are the right agents for the job!