Calculating the Real Value of Your Home Without an Agent

Selling your home without an agent can be a huge decision. It can feel like a giant mountain of a task for first-time sellers. Selling your own house by yourself might sound empowering and there’s no doubt that it’s a challenge to sell your home by yourself as there’s a lot that goes into the process that a typical homeowner might not know. But thousands of people are doing it and once you know the process, it’s actually very doable.

If you are planning to sell your own house and getting ready to put your property on the market, the biggest fear that you might have is – selling your home below its market value and losing money. But what is the right price for your home? A home’s fair market value defines what you could expect to receive if you were to sell your home on that day. This value can differ while you are asking different estate agents and realtors. But why take their word for it?

If you don’t know how to determine the market value of your house, you are not alone. Most of the homeowners are absolutely clueless about their home’s true worth.

Don’t be an average homeowner.

Here’s how to know the real value of your home if you are selling it without an agent:


Factors that determine a home valuation

  • Location
  • Safety
  • Number of rooms
  • Curb appeal
  • Square footage
  • Type of the property
  • Age of the property
  • Upgrades and improvements
  • Market trends
  • School district
  • Construction and repair

Use online valuation tools

There are numerous websites available on the internet that can give you an estimate of your home’s worth such as Zillow, CoStar, and Redfin, etc. You can use these sites, along with other methods, to build a rough estimate of your property’s market value. To achieve accurate results from these websites, you need to provide honest information about the property. You can also include the remodeling or upgrade work that you might have gotten done after you purchased the property.

Square footage

This is a very basic, yet effective method of evaluating the worth of your home. Locate the recently sold properties in your area that are similar to your home in size, features, age, and square footage. Find the mean sales price of these properties by adding up the total sales price of each property and dividing it by the number of properties. Repeat the same step for the square footage of the properties. Divide the mean sale price by average square footage to calculate the average value of the properties per square foot. Finally, multiply the average value of the properties per square to the number of square feet in your home. This will give you a very accurate estimate of the fair market value of your home.

Mean sales price = Total sales price of all properties / total number of properties

Mean square footage = Total square footage of all properties / total number of properties

Per square foot value = Mean sales price / mean square footage

The market value of your home = Per square foot value * Number of square feet in your home.

Perform a market analysis

If you hire a real estate agent, they usually perform a market analysis for you to evaluate your home’s worth. But since you are selling our own house, you’ll need to run a comparative market analysis by yourself. To make sure that the price point that you’ve set for your home is fair, you should study the market trends and prices of the properties around you in your neighborhood. In your market analysis, match your property to comparable properties in your neighborhood in terms of features, to get an estimated value of your property.

Hire an appraiser

Home appraisers tend to give the most accurate home valuations so retain a home appraiser to conduct an appraisal of the property. An average home appraiser costs about 300$ to 500$, depending on the size and location of the property. While estimating the value of your home, appraisers consider trends in the market and comparable properties sold or listed recently. In addition to this, appraisers also research public records, gain further information about the value of your neighborhood and complete a far more thorough inspection of your home.

Why You Should Pre-Plan Your Own Funeral!

Years ago, arranging a funeral was something most people took for granted and relied solely on the funeral home. When death would occur, a family member or a close friend would simply notify the local funeral home to have the body picked up, entrusting the funeral director to guide them through the funeral arrangement process. The family then would meet with the funeral director and chose a casket, name the place for the service, chose the Cemetery and make payment arrangements. The funeral director would be made the beneficiary if the family used burial insurance to pay for the funeral, otherwise they would pay for the funeral with cash, check or credit. In today’s times, with the rising cost of goods and services, coupled with a sluggish economy, many people have concerns about the type of funeral they will I have when they die. Most people have no idea of the cost of a typical funeral. A traditional funeral averages about $8,000, the grave, vault and grave opening and closing are not included. Some people being aware of the costs involved and having a family, that is able and willing to cover the costs, need not be concerned. However, that is not always the case, perhaps leading to some of the questions, I have been asked recently. There are some key components that one should be aware and understand about Preplanning a funeral, be it for themselves or someone else.

The first thing one should consider is the type of funeral they would want. The majority of today’s funerals are Full Service Traditional Funerals. However, recently more and more people are choosing non-traditional burials such as Cremation, Direct and Green burials, some out of personal convictions and others falling prey to the economic conditions. Direct and Green Burials are gaining in popularity in states where they are legal. Embombing and a grave are not necessary with Cremation. There are many ways to provide a final resting place for the body. The choices are grave or mausoleum for the traditional funeral, scatter Cremains on land or water or keep in an Urn at home in for Cremation. Direct and Green burials must be buried in ground.

Personal instructions for the family can be considered once the main components are settled. Some of these instructions can be as small as the color of the casket, type of flowers or whether there should be a viewing of the body. Name the place for the funeral service, whether it is in the Chapel of the funeral home, at a public venue or in a Church. Some chose grave side service eliminating the cost of a procession to the cemetery with family limousine and motorcycle escort service. Some people chose a public service or a service by invitation only and name the guests or chose one limited to family members. Discussing your choices with family members and close friends, before making a decision is a good idea. Put your choices in writing, with copies kept in a safe deposit box, with your attorney and in the hands of family members who are most likely to survive you. Preplanning your own funeral will give you comfort, knowing that your final wishes are known to the family, and you are relieving them of the burden of making the many necessary decisions, when planning a befitting end of life memorial service for you.

Nobody can argue against Preplanning being sound advice, but Prepaying is another matter and is rarely good advice. There are reasons I believe Pre Paying is not in the best interest of a person or family preplanning their own funeral. The laws governing funeral homes that sell preneed funerals are different from state to state, and few favor the consumer. Most funeral plan salespeople are just that, salespeople, they are not industry professionals and many are just looking for a check and a signature.

All people are not the same, and there is no one method that fits all situations. Providing the funds for a future funeral is a financial issue and it is best to consult a professional financial planner.

This article is for informative and educational purposes only, and should not be understood as legal advice

Housing Market Revealed 2006 – Is The Party Over For Real Estate?

Prior to 2000, the real estate market and the economy were always cyclical. For instance, the US housing prices tended to weaken as the GDP and employment prospects declined, particularly during the recessions of 1980 and 1990. The economic downturn of 2000-01 defied many predictions by having the opposite impact on real estate prices. Over the past five years, real estate prices have increased approximately 10%, outperforming equities by a wide margin.

Historically, real estate has been viewed by many as a good hedge against inflation. During the last five years however, real estate prices have exceeded the rate of inflation by a gross margin.

Given the significance and size of the U.S. real estate market, our analysis will focus on U.S. real estate, which is currently quite representative of markets around the world.

U.S. Real Estate

In 2005, America’s real estate boom was strong, with prices up by 13%. But there were signs that the market was weakening. Sales of existing homes fell this January to the lowest in nearly two years. Meanwhile, the number of unsold homes rose to the highest level since 1998. In addition, new homes continue to be built at the fastest pace since 1973. In other words, while the supply of housing is at the highest level, demand for homes has fallen dramatically, rendering a downward price adjustment inevitable.

Due to the low interest rate environment, affordability ratios are still within historical ranges, although they’re approaching a 14-year low. On the other hand, other ratios that disregard the interest rate level (e.g., home price to rent, home price to disposable income) appear to have escalated.

The Supply / Demand Imbalance

In general, we see no evidence that the supply factors are positively affecting the prices. For example, the rate of population growth has not increased significantly and the supply of land available for housing remains largely unchanged. In fact, research by Goldman Sachs reveals that U.S. residential investing is at the highest level in 40 years, yet new household formation is growing at its slowest rate.

Based on the experience of the last few years, we may see a fundamental shift in sentiment, favoring home ownership. Up to now, most of the baby boomers nearing retirement have decided against downsizing their homes and opted for the financial security of their current houses instead.

Other Asset Classes

Financial exposure to real estate is generally a good thing as long as it is a reasonable proportion of one’s assets, and the investment environment is favorable (e.g., not in the midst of a bubble or heading into a decline). In a diversified portfolio, real estate investments can be a very good diversifier due to relatively low correlations with other asset classes.

Contrary to popular belief, holding a diversified portfolio of various asset classes (with a large equity exposure) has been a much better investment than buying a house during the last 30 years. For instance, a dollar invested in real estate in 1975 would grow to $6.07 while it would turn into $36.14 if invested in the S&P 500. However, in calculating the exact returns one must factor in taxation and deductibility of interest rates.

The Failure of Risk Management

As rising house prices lift the market value of collateral on banks’ existing loans, banks are willing to lend more, pushing prices higher. In effect, banks have an incentive to lend when property prices are rising, and to pull out when prices fall, leading to extended boom and bust cycles.

For the past few years a number of researchers have pointed to the non-sustainability of the housing market, comparing it to the high-tech bubble of 2000. Barring any fundamental change, the primary question remains why real estate prices have defied this historical market relationship for so long, and whether will they will ever reach the tipping point.

InvestWELLFinancial.com

The full E-book is located at: [http://todaybooks.com/product_info.php?products_id=127]

The Wisdom of Hindsight in the Real Estate Market

“Consider the following observations about the Metropolitan Washington, D.C. real estate market:

  • A home in Silver Spring, Maryland comes on the market and sells in one day. That’s no big deal. But the real estate agent received forty-one offers. I’ll repeat: Forty-one offers in only a few hours.
  • A home in the city of Alexandria sells in one day at a price $100,000 over the asking price. I’ll repeat: The house sold for $100,000 more than the seller’s asking price.
  • More than 30 people camped out for 7 days in order purchase units in a new urban townhouse development. I’ll repeat: Thirty people living on the streets with sleeping bags and tents in order to buy in a new townhouse development.

A dream come true you say? These are excerpts from the article “One Word For Metro Washington Real Estate: Insane, written by Henry Savage for RealtyTimes.com…in March 2004.

Almost five years ago Mr. Savage painted a picture of a thriving sellers market that had gained so much momentum that home buyers were waiving financing and home inspections to make their offers more attractive to home sellers. As we have all witnessed, any market, whether stocks or real estate, cannot sustain this level of exuberance before something has to give.

Home prices increasing 20% per year eventually results in fewer buyers for these over priced homes. Add to this mix, greedy money lenders offering low introductory interest rates (only to spike in a few years), and resulting in too many people owning homes they can’t afford. The demand for real estate begins to decrease, inventory rises, and eventually home prices drop. Sound familiar?

The increase in interest rates, would also have a devastating effect on all of those buyers who purchased homes with little or no deposit and are faced with the expiration of the attractive introductory rates. Foreclosures and housing gluts would be a natural result of this market.

Mr. Savage predicted this outcome in his article; stating “the bigger the boom, the bigger the bust”. Real estate, as do all markets, runs in cycles. The plight of our current market is the fall out from the golden age of real estate we experienced a few years ago.

Currently, in the Metro D.C. market, the average Sold price is just under $550; a 12% increase from the same time last year. It’s not 20%, but definitely a more realistic increase one would expect. Perhaps we are entering a new cycle in real estate; one that reflects adjusted home prices, sensible lending practices, and smarter buyers.

Where Housing Conditions in Southern California Stand in 2016

What kind of urban future can the residents of South California hope for the coming year? Here’s what’s in the upping according to market trends and planning designs. There are going to be higher prices and increased congestion with an accompanying degrading quality of life. As acerbic author of “Dr. Housing Bubble” blog puts it: You may as well look forward to becoming ‘los sardines’ in a future of relentless cramming and out-of-sight prices.

Both factors are at fault here: The relentless demand for housing and the willingness of the hugely rich to continue forking out money to paying for building that would take less wealthy three lifetimes to accumulate. Single family homes today cost a nice plot in heaven. A plot in San Francisco – a shack really – would cost as much as a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice family homes in Irvine, Manhattan Beach and Santa Monica are almost as bad. Of course there are locations in California’s poor cities and farmlands, where prices are static and you have more breathing space. But do you want to live there…

Even in these poorer neighborhoods, the state has approached the problem of housing affordability by subsidizing the construction of affordable housing through bond funds, tax credits, and other resources. But these programs have historically accounted for only a small share of all new housing built each year so they, too, cannot meet the housing needs of a majority of South California’s working and lower middle class population.

Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are the second factor that results in this cramming and high pricing specter. And then there’s California’s planning regime which rejects areas that are not “Green’ enough (at least not ‘Green’ enough to them) and they hop for ever-denser development at the expense of single-family housing in the state’s interior.

Many areas of high-density cities like Los Angeles are seeing construction of massive skyscrapers – rather tower-like monstrosities – in a few selected “transit-oriented” zones. Planners say they aim to stop short of super-density. The wealthy will still have their backyard play sets, barbecues and swimming pools. Which brings us to another point:

The gap between wealthy and poor (or less disadvantaged) in South California has never been larger

The poor live in one area. The lifestyle of the wealthy and housing prices maintain the distance. The Legislative Analyst’s office (LAO) which is the California Legislature’s advisory agency, had this to say:

Housing in California has long been more expensive than most of the rest of the country. Beginning in about 1970, however, the gap between California’s home prices and those in the rest country started to widen. Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued. Today, an average California home costs $440,000, about two-and-a-half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).

Property prices over the past two years in prime areas in South California such as Orange and Los Angeles counties have risen at a rate more than 10 times the relatively paltry increases in weekly paychecks. Now you can’t buy a house in Orange County or West L.A. without a triple digit income and in LA central forget it. Surrounding areas are not much better.

The biggest losers are working or middle class families (who happen to be mostly minorities) who want to bring up families in nice areas with loads of grass and field. Unfortunately, most of them are forced to relinquish such dreams. Aside from South Los Angeles having become a high-density population, it will take them lifetimes to accumulate enough money to buy a “sardine can” in this city.

Until now, the younger middle-income homeowners, particularly families, lived on the outskirts. In 2015, reports showed that homeownership rates are more than 25 percent higher in the Riverside-San Bernardino area than in the Los Angeles-Orange County area. Minorities in these areas also do much better. The homeownership rate inland is a quarter higher among African American and Asian households. The rate for Hispanics is nearly half again higher than in Los Angeles-Orange.

But now housing prices have soared – are soaring -and these areas are becoming unaffordable too. Three of the most crowded areas – based on people per room – are in Los Angeles County: South Los Angeles, the Pico Union area near downtown L.A. and Huntington Park. Southern California trails only Miami, Fla., for the highest percentage of residents who spend 40 percent or more of their incomes on rent or a mortgage.

In short, Southern California has become notorious as one of the highest priced, density crammed spots of the nation. Living there now costs two and half times the national average, and rents are 50 percent higher in these areas than in the country as a whole. Homeownership rates now stand at 48th among the states.

Where do we go from here?

Some inventive and aspiring people who want to fix or buy a home have found a way out by approaching lenders in the alternative commercial or residential sector. Shunned by banks because of poor credit history or trustworthiness, but still wanting to live in LA, these middle class individuals have approached alternative sources for their loans.

These commercial or residential private lenders (otherwise called hard money or bridge investors) offer the advantage of evaluating the borrower’s property rather than his credit history which means that if the borrower has a particularly promising house that he or she wants to hook, the lender may extend proceeds for the borrower to make the sale. The process is fast and convenient. Many find that it takes less than a week. There is some credit evaluation but hugely less than the banks conduct and the entire underwriting process is preformed in as timely and convenient as possible. That is one of the advantage of approaching hard money or private lenders; the system is personal. The lender meets the borrower’s needs.

The high rate of balloon and interest do dissuade many potential borrowers, but south California is glutted with money lenders which make it possible to ferret out negotiable prices.

Put it this way: If you are one of millions of people who want to find a home in the “sardine city” and maybe escape cramming – there’s one other option for you. Private commercial or residential money lenders otherwise known as hard money or bridge investors.

How about it?