For Sale By Owner – How to Prove Your Home is Worth Your Asking Price

June 18, 2008

Forsalebyowner

If you were a home buyer and the property owner told you all about how wonderful the house was and all the reasons it was a great place to live, would you believe them?

Homeowners Are Biased
After all, they’re just trying to sell their home and might say anything to close the deal.  Not that most people would lie to house hunters, it’s just that the home owner is not the most objective person to ask when looking at the quality and value of the property because they have a lot of money and emotion invested in their house, condo, or duplex.

Understanding the home buyer perspective can definitely help when trying to sell your home. Of course almost everyone selling a home was at one time a buyer and can relate to this situation.

Proving the Value of Your Home
So how can you the home owner convince prospective buyers that your property is worth your asking price?  One of best ways is to get a trusted third party to document the condition and value of your real estate.

Home Inspectors – The first thing you might want to do is hire a home inspector to examine your property and document all their findings.  There are actually several benefits to hiring a home inspector.  The first is that you’ll discover any issues and have a chance to correct them before buyers start looking at your home.  If you find something you don’t feel the need to correct, don’t have time, or can’t afford it you can at least determine the cost of fixing it and have that information when it comes time to negotiate price.

The second reason that having your home inspected can help you sell it is that you have documented proof of the condition of your property from an objective third party.  Of course, “objective third party” is a key component so make sure you hire a well known and inspector with good credentials.

Home Appraiser – Once you’ve identified/corrected any issues with your home hire a real estate appraiser to document your home, research it’s value, and prepare a report on how much money it’s worth in the current market.  This will give you an idea of where to set your asking price and can be used a proof for the buyer that the home is worth the price.

Document Home Improvements
Another thing you can do to help demonstrate both the quality of the home and the care you’ve shown for it is to prepare a list of all the minor & major enhancements and repairs that happened to the property while you were it’s owner.  If you’re not the original owner and have details on work done before you bought it, include those as well.

Building Trust in Buyers
Think about it from the buyer’s perspective.  If a home owner gives you a copy of a home inspection, real estate appraisal, and documents on all the enhancements and repairs for the property you’ll likely feel that they’ve not only done a good job taking care of the home but also that they’re being upfront with all the details and can be trusted.

What’s Your Home Worth – Summary
Having trusted third parties document the condition and value of your home allows you to build trust with home buyers and can help establish the validity of your asking price.  Next time in the For Sale by Owner Tips series we’ll look at a few minor things you can do that make a big difference when getting your home ready to sell.

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Ben

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Ben
Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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9 Responses to For Sale By Owner – How to Prove Your Home is Worth Your Asking Price

  • Alisa

    All great ideas. It is probably very important to make sure you are making the right kind of home improvements. Because not all home improvements add value; so I have hears. This may take some time to research especially in the real estate market we are seeing today. But I think it will be worth the time and effort if it is able to reduce the time your home is on the market.

    Althought I just started my journrey into the stock market:

    http://www.ourstockmarketjourney.blogspot.com/

    I think that real estate is also a very good way to build wealth.

    Be well.

  • Jimmy @ MoneyRemix

    Great tip about documenting home improvements. I’ve made a number of improvements to my house in the few years that I’ve lived there that probably aren’t reflected in the public valuation.

    I don’t know if a detailed home improvement list would guarantee a higher selling price, but it definitely couldn’t hurt.

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