Using Like-Kind Property When Selling Your Home

Using like-kind property when you are selling your home can help you determine how much your home is worth. Here are a few things to consider about using like-kind property when selling your home.

Determining Value

One of the most important parts of the process of selling your home is determining the value of it. You have to figure out how much your home is worth before you can put it on the market. Depending on how you price your property, you could sell the property quickly, or it could take months. Because of this, you want to take your time when pricing the property. One of the best ways to do this is to use like-kind property. 

Like-Kind Property

As the name implies, like-kind property is a type of property that is similar to your own. By comparing your property to other property that is very similar, you can come up with an approximate value for your property. When you try to find a property to compare with, you should look for a home that has approximately the same square footage and is about the same age. It should have about the same improvements and features as your house. 

Comparable Sales

The first place that you want to look when you are trying to use like-kind property is a listing of comparable sales. You should be able to find a listing of comparable sales online. There are many different websites that will allow you to see what houses have sold for in recent months. You should be able to type in your address and immediately see all of the houses that have sold in your neighborhood. By looking at comparable sales, you should get an idea of what the actual market is for your house. Looking at actual sales figures tells you exactly how much these houses have sold for and not what people have listed them at. Many times, there is a big discrepancy between these two numbers.

Listings

Even though comparable sales are more important, you should also get a look at current listings in your area. If the value of real estate in your area has increased substantially, you will be able to tell by looking at current listings. You want to get an idea of what the market is for similar properties.

Example

Let's say that you are trying to determine how much to list your property for. You pull up a list of recent sales in your neighborhood. One house sold for $200,000 and was 2000 square feet. Another house sold for $180,000 and was 1800 square feet. By dividing the price by the square footage, you can easily see that these properties sold for $100 per square foot. If your house is 2200 square feet, you could realistically price yours at $220,000, as long as it is similar to the other two properties. 

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