Your home isn’t worth that much

Some sellers are in denial about the value of their homes.

Whatever the reason, you could be overpricing your home when you put it up for sale. Recent studies by Zillow, the Journal of Housing Economics and Quicken Loans confirm that there’s a considerable—and widening—gap between the values that appraisers and homeowners assign to properties.

Sure, you may bump up your price to allow for negotiation, but this data shows that most sellers go beyond wiggle room. Why?

• You’re emotionally attached. It’s OK to treasure the memories you created in your home—just don’t expect anyone else to pay for them. The house is a blank slate to them.
• You overpaid for the house. If you bought during a time of inflated prices, you may have paid more than your house was worth. That’s unfortunate, but you can’t expect other people to pay for your mistakes.
• You purchased after the housing market collapse. Everyone wants to think they got the best deal possible. And if you purchased after prices fell sharply, you’d like to believe you bought at the absolute bottom of the market and that your home is worth considerably more now. Not necessarily.
• You’re trying to recoup the cost of improvements. Investing $25,000 in a kitchen upgrade doesn’t automatically add $25,000 to the value of your home. Most projects, big and small, return only a fraction of the homeowners’ investment.

What’s the best way to get an accurate value of your home? Don’t consider what you paid or how much you owe. Those numbers aren’t related to how much a buyer will pay.

Look at your local market’s data. That shows what comparable homes are selling for and how much properties in your neighborhood have appreciated over time. An appraiser or real estate professional can help you access and interpret that information. An objective look at your real estate market will result in the most accurate price for your home.