What is your home’s value? Notice that the question is about your home’s value and not its price, because there’s a difference between real estate values and pricing.
There are a number of factors which affect a home’s value: location, condition, upgrades, square footage, lot size – those are just the obvious factors. Less obvious factors include current real estate market conditions, changing demographics, employment wages, interest rates, and the economic outlook for the area.
As you can see, there many things which affect a home’s value, and a home owner can only effectively influence a few of these. Value is something that is always changing – just look at any property on Zillow, and you’ll see a chart for how much Zillow thinks the value has increased or decreased this week, month, year, etc.
In truth, value is subjective, as your home may be worth more to you than it is to anyone else in the world. Price, on the other hand, is a numerical representation of value. Price is really just an indication of value at one point in time.
How much a homeowner values their home will translate into a dollar figure, and how much any particular buyer values that home will translate into another dollar figure. Most people will place a somewhat different value on a property, and translate that value into their price.
Because of the disparity between what homeowners feel is the value of their home and the price buyers are willing to pay, many homes remain unsold on the market for months on end. A wise seller will detach himself from his own perception of a home’s value, and instead look at the price that buyers are presently paying for “comparable” homes. Starting with an unrealistic idea of the market price for a home will usually cost home owners thousands of dollars when they finally do end up selling.