The Top 3 ways to Determine a Homes Value

In most states there are values determined by the tax assessor’s office. It might be called your tax value, assessed value or something similar. That number might not be 100% of the property value. Usually there is some type of formula that each city or state uses.

Unfortunately using the taxable basis fails to take into account a number of things, like:

1. What are homes actually selling for in your neighborhood?
2. What is the condition of your home?
3. What upgrades have been made to your home?

As you might be able to guess, all of these factors can have a huge impact on the value of your home and would be in no way reflected on the taxable basis. The result, your home will either be over- or under-priced.

Here are the top 3 ways to determine a value of a home:

1. Appraisal

An appraisal is probably the most accurate way of determining a home’s value. While it seems to be the most costly in the short term, what it can save you in the long run by having your home accurately priced offsets the upfront cost. If you are going to sell your home on a “For Sale by Owner” basis, I cannot encourage you enough to have an appraisal done. When you order the appraisal, make sure you ask for a market value. This will give you the closest possible pricing guide for your home.

1.     Real Estate Agents

Making use of a real estate agent can be an excellent way to determine the value of your home. Real estate agents, like appraisers, actually look at recent sold comparables and look at your home to determine how its condition affects its value, and then suggest a price before listing your home. Unlike appraisers, they also take into consideration the current competition. They will perform an analysis of value, for no charge in most cases.

When you meet with an agent, ask to see “comparables”. They should show you recent sales comparables as well as what is currently on the market. Ask the agent WHY they are suggesting a particular price. Also ask them what you should expect to receive for a sales price on your home. A good real estate agent should easily be able to justify the asking price with accurate comparables and condition analysis of your home.

2.     Your Neighbors

Another method I have seen employed quite often is to price a home’s value based on what your nearby neighbors are trying to sell their homes for, and then almost always adding some. Why would you add some? Of course, your home is better, right? It might be or it might not be. But most sellers think their home is nicer or more updated than their neighbors. Be careful with this, as it can be a dangerous way to price your home.

This method makes several assumptions that will likely lead to pricing trouble:

1. You are assuming that your neighbors’ homes are priced accurately.
2. You are assuming that your home is genuinely comparable to your neighbors.

Even if you happen to live in a neighborhood of identically sized ranch houses with identical lots, there can still be pricing differences based on the condition and improvements in the home. If you have a finished basement or a newly remodeled kitchen, you need to be able to accurately set a value for those improvements.

Want to learn more about selling your home as a rent to own?  See Wendy Patton’s book, Rent to Sell, Your Hands on Guide to Sell Your Home When Buyers Are Scarce.

If you have any questions or comments please feel free to leave them in the comment section!

How to Get Sellers to Call You and Offer you Their Home for a Rent-to-Own

Now that we’ve discussed ways to find rent-to-own homes, what would you say to having rent-to-own sellers call you and offer you their home? That’s right. You can just sit by the phone and wait for sellers to call you and tell you about their rent-to-own home.

Many of these sellers will not have their homes listed with a real estate agent, so if you are working with an agent, this may not be for you.

The advantage of having the seller call you is that you already know he is willing to consider rent-to-own. You just need to figure out if his home and terms will work for you.

“Alright Wendy! So how do I do this?”

Posting ads is a way to get sellers to come to you.

Posting Ads

The first way is by posting ads about yourself and rent-to-own. Here is one example:

This is a sample ad of what you would put in the newspaper where space is an issue – the more space you use the more it costs you. These ads though are just enough to get the attention of a home seller who has started to think about what choices he must make if he doesn’t sell soon.

You can also post an ad on FREE sites like Craigslist, Yahoo! groups and Google groups. I also recommend posting some flyers on community bulletin boards as well as posting flyers using these FREE Internet sites. These methods are much cheaper than the newspaper classified ads and may be all you need.

The whole purpose of these ads is to filter out the home sellers who don’t want tenants and to get the ones that would consider tenants to call you.

Here are some questions you can ask sellers once they call you:

• Where is your home located?
• Can you tell me what price you are looking to get for your home?
• How many bedrooms and baths does it have?
• Do you know what the rental rates are in your area? About how much were you thinking for monthly rent?

Not only will these questions help you gain more information about the sellers, it will also help you build rapport with the seller as well.  Check out my book Rent-to-Buy to learn more about other ways to get sellers to call you.

Rent to Buy is your hands-on guide to buying your next home as a rent to own.  You can get your next home NOW without having to qualify for a mortgage until later.  To Learn more about Option Agreements purchase your copy of Rent-to-Buy today.

Feel free to comment and let me know of other ways you  have sellers calling you!