Knowing the value of your home is critical before offering for sale. There are several ways to determine the value of your home. Online resources such as Trulia, Zillow, Realtor.com and Federal Housing Finance Agency (FHFA) will provide you with an estimate of the value of your home or your local market overall. Here are the links to these calculators:
|•||Zillow: http://www.zillow.com/ (click on “Zestimate” on the “Find your home” search box)|
Once you have a starting point from these online resources you may want to take it a step further and obtain a value based on the up-to-date transaction history that an appraiser will use to value the property for the new buyer. The best way to do this without spending money is to obtain a comparative market analysis (“CMA”) from a licensed Realtor® in your area. A CMA will identify all the homes that were listed, sold and withdrawn from the multiple listing service in your area within the past 6 months. Based on the size and condition of your home, it will give you an accurate estimate of what your home is worth at the present time. Without this, you may underprice your home and leave money on the table for the buyer or overprice your home and render the buyer unable to fulfill on the contract because the home appraised for lower than the agreed upon purchase price.
With the actual value of your home in hand, you should determine if you will walk out of the closing with money or if you will be required to bring money to the closing – and in what amount. To start, you should request a “payoff” from each lender currently holding a mortgage on your property. This can be done at any time and there is typically no fee. In addition to your payoffs, you must calculate Realtor® commissions, closing costs, title insurance, recording fees, property tax pro-rations and any tax or fee by the county or state to transfer the property to the new buyer (often referred to as a transfer tax). After you’ve accounted for all the fees and costs, you will know exactly what you will receive or be required to pay at the closing. This is commonly referred to as the Seller “net” number and a good Realtor®, title company or escrow company should be able to provide you with a “Seller Net Sheet” prior to listing your property for sale.
These techniques will put you in the driver’s seat before listing your property for sale. Knowing the real value of your home and what you are likely to “net” at the closing will prevent surprises down the road and will allow you to plan your next exciting chapter in life!