One of the first questions every homeowner asks when they decide to sell. And it’s a tough one, because “worth” can imply a few different things. There’s the number the city puts on your tax bill, the number an online site displays you, the price an agent proposes listing for, and the amount a cash buyer would actually pay. Rarely are they the same.
This tutorial will explain what really drives the home prices in Philadelphia, how to compare those multiple statistics, and what to disclose when you ask for an offer so the number you obtain is as precise as possible.
What Influences Home Values in Philadelphia Neighbourhoods
Philadelphia is a city of quite varied neighbourhoods, and sometimes very different blocks.
Two rowhomes that look practically identical might sell for wildly different prices, depending on a handful of characteristics.
Location, to block. Neighbourhoods are important, but in Philadelphia the block is just as important. Homes near decent transit, parks, major commercial corridors or blocks that have had a lot of recent remodelling often sell for more.
Recent sales in the area. The best indication of the value of your house is the actual sales price of comparable homes in your area over the last several months. These are called “comps”. The closer the home is in location, size and condition the more useful.
Condition. This is usually the biggest factor of all. A totally updated home with new kitchen and bathrooms will sell for a lot more than the identical house with a leaking roof, flooding in the basement or wiring from decades ago. Our guide on selling a house that needs repairs discusses how repairs impact the price.
Size and layout. The quantity of bedrooms and bathrooms are quite important. A finished basement, an extra half bath, or a floor plan that fits for today’s purchasers can increase value.
Type of housing. Rowhomes and twins and singles attract diverse buyers. In neighbourhoods where parking is scarce and outdoor space is at a premium, a driveway or yard typically makes a twin or single home stand out.
Major systems. Age of roof, heater, water heater and electrical panel all play a part. Buyers and inspectors look at these thoroughly, and older systems might reduce the price.
The market itself. What purchasers are prepared to pay at any particular moment depends on the interest rates, the time of year, and the number of homes for sale nearby.
Market Value versus Assessed Value vs Cash Offer
These three integers are often confused. Here’s what each one really implies.
Valuation. This is the value the City of Philadelphia’s Office of Property Assessment (OPA) puts on your home to determine your property taxes. You may also search it up online with your address if you want. That’s a good beginning point but it’s based on large data, not a walk-through of your home. It may not be updated to reflect current updates, damage or what’s happening on your block right now, so it might be higher or lower than what your home would actually sell for.
Market price. This is what a buyer would probably pay for your home on the open market. It’s usually worked out by looking at recent sales of similar properties. An agent may provide a comparative market analysis, and if the buyer is taking out a mortgage, the lender will conduct an appraisal to verify that. Online estimates will offer you a ballpark figure, but they typically omit the condition of the house, which counts a lot for older Philadelphia properties.
List price. This is the amount the agent recommends you ask for the home when you place it on the market. There’s no guarantee. But it’s a beginning point for negotiations. You will pay commission, closing expenses and maybe repair credits out of the final sale price. The final sale price might be greater or lower.
Cash Offer. A cash buyer will typically begin with a look at what the home would be worth if it were entirely fixed up, based on previous transactions in the neighbourhood. They then deduct the cost of the repairs, the time the work will take and their other expenses. So the offer is what remains. It’s usually less than the market value of a fully updated home, but you save on repairs, showings, fees and often closing costs. Check out what cash home buyers are looking for in Philadelphia houses.
How to Compare Numbers Properly
A lot of sellers make the mistake of comparing a list price to a cash offer and thinking they are the same thing. They aren’t. What actually counts is the amount you walk away with.
When comparing options, consider:
- Repairs you will need to do before listing
- Agent’s commission
- Your portion of the transfer tax on property and other closing fees
- Months of mortgage, taxes, utilities and insurance while house is on market
- Buyers’ requests for repair reimbursements or price reductions following inspection
- The risk of a financed buyer’s loan falling through
When you add it all together, the margin between a listing and a cash offer is typically lower than people realise. We walk through it side by side in our article on cash offers vs traditional sales.
What to Say When You Ask for a Cash Offer
The more a buyer learns about your home up front, the more accurate their offer will be, and the less likely it is to change later on. Here’s some useful info to share:
- The basics. Address, number of bedrooms and bathrooms, and whether it has a basement.
- The state, indeed. Any known problems like leaks, cracks, water in the basement, etc. Nothing to hide. A good buyer knows that older properties require work.
- The age of big systems. If you know, roughly when was the roof, furnace, water heater, and electrical replaced?
- Updated recently. A new roof, kitchen, or bathroom can increase the offer, so be sure to point them out.
- Who’s in. If the residence is unoccupied, owner occupied, or has tenants.
- Unresolved issues. Unpaid water bills, open L&I infractions, liens or back taxes. These won’t stop a cash sale but are useful to know early. These are handled as described in our guide on deed transfers, liens and title issues.
- Estate particulars. If you inherited the house, tell the buyer about the status of probate.
- Your timeline. Whether you need to close fast or want more time to move.
- Pictures. If you’re out of town, a few images can get a buyer started before a walkthrough.
Some Tips on Getting the Right Number
Consult multiple sources. Check your assessed worth, look at previous transactions in your neighbourhood and chat to more than one buyer or agency.
Be realistic with conditions. If your house needs considerable remodelling, recent sales of remodelled homes on your block are not a fair comparison.
Ask them where they got the number from. A cash buyer or an agent should be able to explain how they came up with their pricing.
Don’t purchase an offer. If they are a real buyer, they will not charge you a dime to tell you what they’d pay.
See What Your Philadelphia Home Is Worth
The easiest approach to find out what your house could sell for as-is is to enquire. DI Solutions LLC buys houses in ANY condition anywhere in Philadelphia and we will show you exactly how we got to our number. Still deciding what to do? Check out our advice on how to sell your property fast in Philadelphia where we compare listing with an agent vs selling for cash.
Call us at (267) 575-0354 or request your free cash offer today. There is no obligation and we are pleased to answer your questions even if you decide to list your house instead.