IS YOUR PROPERTY OVERPRICED?

(You will also want to see "CORRECTLY PRICED HOMES NET THE HIGHEST SALES PRICE")

Sellers frequently determine their minimum acceptable sales price by adding the original purchase price plus all improvement costs, plus their expected (desired) appreciation value. Although some sellers are very adamant in believing this is an accurate approach to determine value, the actual fair market value of the home has nothing to do with this frequently used formula.

Factors affecting the accuracy of this approach:

* A seller may over-estimate the value of capital improvements. Home improvements, such as decks or finished basements, infrequently bring a dollar for dollar return back to the seller. Our market generally returns only 50% to 60% for these types of capital improvements. (The exception to this rule is repairs or improvements which bring a home back up to neighborhood standards, such as painting or re-carpeting just prior to selling a home. These types of repairs can result in over a 100% return on your investment.) We consistently find that updating kitchens and bathrooms pay back the highest percentage on the money invested.

* A seller may have actually paid too much when the home was purchased. Some people really do pay too much when they buy. When they do, they realistically should not assume the next buyer will do the same. What makes matters even worse, most buyers who overpay honestly don't know they did or did so in a very "hot" market when they had little chance of negotiating a fair purchase price.

* Sellers frequently over-estimate the value of the actual appreciation of their home. This common mistake happens because we can honestly believe our home really is superior to others in our neighborhood. This stems from the fact that we frequently have fond memories about our home and families over the years of our ownership. When estimating the actual market appreciation of a home, we see sellers frequently adjusting the appreciation figure with what I'll call "fond memory value". We also seem to remember newspaper articles about area appreciation over the years, but can quickly discount reports showing declining or negative valuation trends.

Some points to consider when pricing your home include:

* What does your county assessor's office show your assessed value to be?  This assessed value is generally an indicator of your property's value.

* What are the most recent sales prices of three properties similar to yours? After appropriate adjustments, this will be your most accurate indicator of your fair market value. Consider making necessary adjustment for:

a) finished square footage;

b) air conditioning;

c) number of garage spaces;

d) views;

e) quietness of location;

f) superior location such as backing to a green belt or cul-de-sac street;

g) age differences;

h) differences in builder quality;

i) specific upgrades of each home compared to yours;

j) date of comparable sales versus your sale.

Let us discuss these and many other specific marketing variables with you before you list your home. Simply call us at 303-880-4944

or e-mail us at:
 info@DenverRealEstateOnline.com