There are many factors that go into appropriately pricing a home for sale. A competent agent will use a variety of sources in order to properly advise you. It is important to remember that any valuation is an estimate based on the data available at the time.
The three main sources an agent should use include the assessed value, an appraisal and the fair market value.
Many sellers make the mistake of using only the assessed tax value and then adding on for any and all changes they have made to their home. The emotional attachment can affect the seller’s ability to look at all the data objectively. These are usually the homes that are overpriced and will sit on the market for an extended period of time. Assessments are done by local government employees for the purpose of calculating property taxes, and may drastically differ from what a home may sell for. Assessments in North Carolina must be done at least every eight years, but may be done more often. This time frame means that the information may be outdated. Another tool used is an appraisal. Appraisals are conducted by certified appraisers who use formulas and standards to arrive at an educated opinion that may be closer to market value than a tax assessment. For this reason, appraisals are usually only valid for the time they are done. Appraisals performed years before have little value. An appraisal is used by the lender to assure that the property value is equal to or greater than the amount of money being borrowed to buy the home at the time of the sale. The agent that you select should do a report for you, called a CMA, which shows homes that are similar to yours that have recently sold in your area. Some allowances are made for variations to properties.
Having an agent that is knowledgeable about the current market is critical to accurate pricing and being successful with selling your home. It is in everyone’s best interest to price a home to sell within a short period of time. Homes that sit on the market for long periods of time become stale and may be undesirable to some buyers.