Homeowner Yetta Levitt knows more about real estate values than most agents – which she’s not. She tracks the sale price of local properties through public records. She visits neighborhood open houses to check out their condition and asking prices. She posts online comments about local property value trends as reported in local news stories.
So when it was time to sell her Nokomis, FL house, she knew just what to do: sell by owner for maximum return. But would her homegrown estimating skills hold up in today’s volatile market?
Estimating home value is essential but tough. ForSaleByOwner.com offers homeowners a range of tools for figuring out about what their homes would fetch if they were to sell today. From publicly available sales records to formulas for calculating equity to computerized valuation reports, ForSaleByOwner.com equips homeowners with the information and knowledge to correctly estimate the value of their homes.
Levitt was one of four winners in ForSaleByOwner.com’s “Is Your House Priced Right?” contest, which invited homeowners around the country to submit short essays explaining what they thought their houses were worth, and why.
Levitt’s detailed analysis utilized many of the strategies recommended by ForSaleByOwner.com. She had the house formally appraised and priced it accordingly when she put it on the market in September 2009 for $698,000. But Levitt was determined to maintain that price, hoping that nearby foreclosures would not erode the value of all the houses in her neighborhood.
The house did not sell. In March 2010, Levitt dropped the price 20% to $558,000. “Initially I was reluctant to admit that foreclosures and short sales should factor in. Then reality dawned and I realized, you can’t avoid using distressed sales as comps,” she says. “I’ve always bought and sold by owner, over 25 years, my own homes and for my mom. In all that time I would have been highly offended by a 20% discount. But, it is what it is.“
Still the house did not attract any credible offers. The couple went ahead and bought a smaller house that better fit their empty-nester lifestyle, a few miles away. Levitt dropped the price in October 2010 and again in December 2010. By May 2011, the house was listed for $498,000 – 11% less than the December 2010 price. Levitt’s price reductions were far from arbitrary. “You have to stay on what the banks were doing,” she says. Replicating some of the process used by appraisers and reflecting advice at ForSaleByOwner.com, here is how Levitt calculated the home’s value:
• Analyzed six comparable waterfront sales within the last two months
• Three of the comps were distressed, three were traditional
• The average selling price of all six was $181/square foot
• She valued her house at $151/square foot “to be aggressive.”
Bringing the price in line with the new neighborhood norm – as recommended at ForSaleByOwner.com – worked. In June 2011, the house went under contract for $500,000. A local contractor bought it –with some seller financing bridging the deal – and intends upgrade and expand the pool area and perhaps update a few of the interior finishes. A major amenity of the property – that it borders a a tidal creek that empties into the Gulf of Mexico and allows expansive views, not to mention kayaking and fishing from the back yard – appealed to him and sealed the deal.
“I’m ok with the price, because we just can’t hold onto the house any longer. It’s just one of those transitions in our lives where it doesn’t make sense to stay put,” says Levitt. “I’m not selling for less than I paid, so I consider myself lucky.”