How to Price a Home

Many real estate investors buy and sell real property as a means to generate a positive cash flow. This can be a lucrative addition to any financial portfolio, but as with any investments, there are risks involved. One of the more difficult choices is deciding how much to try and sell the home for, or how to devise an accurate listing price for the real estate that is being sold.

The first thing that comes to many minds is the county tax appraisal. While this appraisal may seem as good a place as any to discover the cash value of a real estate investment, it will not always give an accurate picture of current trends in the local real estate market. The property taxes often reflect only general amounts and will not give a clear view of what type of real estate pricing the local market will withstand.

Another popular option is the property appraisal. While most lending institutions require the homebuyer to get a property appraisal, it is rarely necessary for the current homeowner to spend the money in order to get this appraisal done. While this is a viable option, it is an added expense in the already costly field of real estate investments.

Allowing a qualified realtor to make set the listing price may or may not be a good idea when selling a home. If the realtor is intelligent, has great information and is highly qualified and honest, then they may indeed be able to offer good insight into the listing price of the house for sale. Many times, the realtor may not be so well informed however, or they may be among those who will put their personal interests above the needs of the client or seller.

Checking out the prices of other real estate values in the same general area is always a good indicator of what is available on the local market and the price ranges that are likely to be paid for a house by a real estate investor. There may still be unforeseen circumstances that the homeowner is unaware of resulting in inaccurate listing prices being published, which will ultimately be detrimental to a quick and easy real estate sale.

When most, or even all of these factors are considered equally for a prime piece of real estate, a more accurate understanding of what exactly mandates the fair local market value of a home will result. This will allow the homeowner to objectively look at all of the relevant information and come up with an asking price that is both fair and reasonable.

Real estate investment is a financial transaction much the same as any other for any portfolio. The only difference is in the physical existence of the real property instead of an intangible stock or bond. As with any financial investments, it is necessary to look at all of the facts that are available in order to be able to make sound investment decisions whether it is for buying or selling the investment in question.