Getting the most for your property is one of your top priorities when you decide to sell your home. You’ll likely use the money you make to help pay for a new home or fund your retirement, but it can be challenging to determine if you’re getting a fair offer on your property.
Many factors help determine what the offer on your home should be and if your asking price is too low or high. If you’ve never sold a home before, the process might seem overwhelming or confusing, especially when setting a fair asking price. Continue reading to learn what a fair offer is and what you can do to get a reasonable price for your home.
What Is a Fair Offer?
A fair offer is a reasonable price a buyer is willing to offer for your home. Trying to decide what qualifies as a fair offer for a house is often the trickiest part for a seller. You don’t want to settle for something too low and lose out on additional cash flow that can help you during your move.
A fair offer will look different based on how you choose to sell your home. If you decide to use a real estate agent, you’ll likely need to repair or renovate your home to get the asking price you’re looking for within the market. You’ll have to spend a considerable amount of time, money and effort updating your home, meaning you won’t be able to fully move until renovations are complete and you close the deal with the buyers.
Many people are on a timeline and want to sell and move as soon as possible. Regardless of the condition of your home, you can choose to sell as-is, leaving the responsibility of renovations up to the buyer.
While you may not get as high of an offer when you sell your home as-is, you won’t have to spend money on renovations, realtor fees or closing costs. Considering you won’t be responsible for these costs, selling your home as-is can still make you a significant return on the value of your home and allow you to move when you’re ready.
If you sell your home as-is, your best bet is to look for a fair cash offer. You can determine if you have a fair cash offer using the 70% rule. This rule states that a buyer or investor will only pay 70% of the home’s after repair value (ARV).
Once you’ve determined the costs of repairs, upgrades and renovations, the maximum offer will be 70% of the home’s value with the renovation and repair costs included. You can use the 70% rule to determine if the offer on your home is fair to yourself and the buyer.
The Difference Between Fair Value and Market Value
When you sell your home, you’ll come across “fair value” and “market value.” If you’re unfamiliar with these terms, you might think they mean the same thing, but they have significant differences:
- Fair value: Fair value is a term to describe the value of an asset, such as your home. The market doesn’t play a part in determining the value of your home and considers the actual worth of the property. Fair value doesn’t fluctuate as much as market value and often remains the same.
- Market value: Market value is the value of your home determined by the current state of the market. Market value relies on supply and demand, which are constantly fluctuating, rather than the actual value.
Between the two, fair value is used the most to determine the value of a home since it’s a more stable way of valuing an asset. Fair value is the most accurate valuation method and has reliable measurement parameters.
You’ll want to ensure you’re getting fair value instead of the market value when selling your home. Depending on the state of the market and your home, choosing to go with the market value could mean getting less money than the property’s worth.
5 Tips to Get a Fair Offer on Your Home
If you want to sell your home without using a real estate agent or having to make renovations, there are ways you can ensure you get a fair offer on your home. Before accepting an offer, consider these tips to determine the value of your home and secure the best deal:
- Compare to recently sold properties: Look for recently sold properties that have a similar size, neighborhood, amenities and condition as the home you’re trying to sell. Many of these homes will be listed and sold at the market price, which you’ll need to consider if you’re selling your house as-is. You can take the price these homes sold for and gauge what a fair offer would be using the 70% rule if you don’t make any repairs or renovations.
- Consider homes that didn’t sell: You can also look at homes that didn’t sell to discover what properties are overpriced. If you’re expecting a high bid but have yet to receive one, it might be because the property isn’t worth as much as you might think, especially if you’re selling as-is. Comparing homes that did sell against those that didn’t can give you an idea of a fair offer.
- Understand market conditions: The housing market is constantly in flux, and certain times are better to buy and sell homes than others, especially if you’re trying to get the total market value of your home. If you understand the prices currently on the market and whether the market is reaching a peak or on the decline, you can determine if you’re getting a fair offer.
- Look into expected appreciation: Consider the area you live in and whether the neighborhood is on the rise or decline. For example, if you live in an area with positive development, such as a new mall or a large company setting up its headquarters, your home will likely appreciate and be worth more when you sell it. However, if shops and businesses are closing their doors for good, the value of your home could reflect that. When determining if you’re getting a fair offer on your home, consider where you live and how it might affect your offers.
- Determine if the offer feels acceptable to you: Using the information above and a keen sense of judgment, you’ll be able to tell if the offer seems fair to you. You should feel confident in the offer you receive. If it feels too low, consider conducting thorough research to determine if you’re getting the best deal for your property or if you need to find another buyer.
Trust HomeGo as Your Professional Home Buyer
Buyers want to get a fair price on a home, and sellers want to get the most out of their sale. Trying to sell on the market can seem like a burden, especially if you have to pay for renovations and realtor fees. HomeGo is a professional home buyer that can help you sell your home in just seven days and alleviate your stress.
We’ll conduct a walkthrough of your home and give you a same-day cash offer on the spot. You’ll know what we’re willing to pay for your home on the first day, so you don’t have to hassle with negotiations or hidden fees. We can close the deal in a week and move on your schedule with our leaseback program.
If you’re ready to sell your home and move somewhere new, schedule a walkthrough today to get started.