Many homeowners have an inflated sense of how much their property is truly worth on the open market. Sentimentality and lack of impartiality mean they often overvalue their most prized asset – their home.
Why Homeowners Overestimate Their Home’s Market Value
There are several psychological and emotional factors that cause owners to overprice their properties:
- Emotional attachment – For most, a home is more than just an asset. Years of memories make it hard to be objective.
- Numb to flaws – Owners become blind to their property’s faults. Buyers will notice shortcomings like dated kitchens.
- Focus on improvements – Owners may overspend on renovations and wrongly assume the home’s value has increased proportionately.
- Judge by investment – The purchase price and money spent over the years bears little relevance to current market demand.
The Risks of Inaccurate Property Valuations
Believing your home is worth significantly more than its true market value can cause major problems:
- No sale – An overpriced property may get no buyers interested, costing time and money.
- Financial strain – Overpaying for a new home places mortgage stress on the buyer.
- Inheritance issues – Inflated valuations complicate dividing assets among heirs.
- Divorce disputes – Couples may argue over the true value of a home in separation proceedings.
Getting an Accurate and Objective Property Appraisal
To get a true gauge of their home’s current value, owners should:
- Hire an independent certified valuer – They will impartially assess your property’s market price.
- Get multiple valuations – Comparing appraisals from different experts provides a balanced perspective.
- Research recent comparable sales – Seeing what similar nearby homes have sold for gives a real-world value indication.
Setting Realistic Expectations for Your Home’s Worth
Homeowners need to detach themselves emotionally and recognize the difference between their home’s personal value and the cold hard dollar value.
- Gauge competition – Review the prices and attributes of comparable homes for sale nearby.
- Consider required updates – Be realistic about renovations needed before listing your property.
- Research average local market times – How long do homes take to sell in your suburb? This indicates demand and pricing expectations.
While it may bruise the ego, getting an unbiased valuation of your biggest asset is critical. Letting go of sentimentality around your home and judging it as just another market commodity will give you a needed reality check on its true value. This helps set realistic pricing to efficiently sell for the maximum possible price.