What’s My House Worth?

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Housing used to be a fairly safe investment—you put your money in and, in a few years when it was time to sell, your house would be worth more than you Finding the right list price for your home can save you money in the long run. Photo credit: Alyson McNutt English. paid for it. Unfortunately, many sellers are discovering that those gains in home equity they thought they had gained during the boom years are nothing more than wistful memories. That’s not entirely true for everyone, however: Even in this brutal real estate market, there are still areas where housing prices are holding steady or even increasing. How can you know where you (and your home) fit in? It’s not an easy answer. Here are six tips for pricing your home correctly in a volatile housing market. Prepare for a Reality Check If you bought your home at the height of the market (or if you cashed out home equity when times were flush), you may be in for the seller’s version of sticker shock. Real estate experts say that even when homeowners recognize that the value of houses all around them has fallen, they often still hold on to outdated ideas about what their own property is worth. If you’re getting ready to sell, it’s time for a serious reality check, says Cincinnati, Ohio-based real estate appraiser Lou Freeman. “There is a saying in real estate that you can’t be objective about your own home,” Freeman says. “It’s true. When a Realtor tells you that the home you bought six years ago for $303,500 will now only fetch $285,000, you may find it hard to believe.” Sometimes sellers ignore expert advice because they have a number in mind that they can’t get away from, says commercial and residential real estate financing broker Todd Huettner. If you can’t get past that number and you don’t have to sell, it’s probably time to just sit on your investment and wait out the current storm. But sellers who have to divest themselves of their property are going to have to face some harsh realities. “What you paid for your house has nothing to do with its current value,” he says. “What you ‘need to get out of the house’ has no bearing on current value, either.” This fact can be a harsh reality check when you consider you need to receive a certain dollar amount on the sale of your home in order to pay off your current mortgage. Talk to More than One Realtor When prices are going down and the volume of sales has slowed to a trickle, it may be time to talk to real estate professionals who work with buyers, at least for the purpose of determining the right price for your home. Working with a Realtor® who has a great record as a seller is usually the best first step. “It’s so important to hear what buyers are thinking in today’s market,” says Katie Wethman, MBA, a certified public accountant and Realtor based in McLean, Va. “Too many agents—especially the ones with the most experience in the business—work primarily with sellers, and they never hear the most common objections of buyers.” Wethman says in this market, sellers might even consider working with someone who is primarily a “buyer’s agent,” or someone who specializes in helping buyers find homes. She says having them help you stage your home and market it may actually help you sell more quickly since they know precisely what feedback they’re getting from people currently looking. Another reason to shop around for a Realtor is to make sure that you’re working with someone who not only knows the area and the market but is realistic about the current state of sales. “Many Realtors are too optimistic or they think providing a high number will get them a listing,” Huettner says.

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