Have you ever wondered how a real estate agent comes up with the property valuation for your home? Are you thinking of putting your home up for sale, or would you like to get it out on the market? Today, we’re going to talk about the four general ways to obtain a property’s value.
1. Look at the assessed value. The assessed value of a home is the value assigned via the county tax records.Typically, this isn’t a great number to use because it could be an assessed value on the land alone, or it could be based on land and improvements, even though the improvements were made many years ago.
2. Online valuation tools. Everyone asks me if the Zillow valuation tool called the Zestimate is accurate, and my answer is no. Online valuation tools average prices that have sold in your area, but oftentimes they’re looking at county records or MLS records. There’s a lot of skewed data in those records. They also don’t look at apples-to-apples comparisons, meaning that if the home next door with less square footage than yours sold for less than your home, they’ll still compare the two homes, which could negatively affect the valuation. Let’s stay away from those Zestimates.
3. Obtain an appraisal. This is actually a great start, and I often ask my clients to get an appraisal for their homes. The good thing about them is that they do look at the homes in your neighborhood that have recently sold, the layout of the house, and they also do apples-to-apples comparisons. However, an appraiser is only going to look back six months. They don’t look at market conditions or trends.
4. Obtain a comparative market analysis (CMA). This is the best way to get an accurate analysis of your property. Performed by a real estate agent, a CMA will look at what has recently sold in your neighborhood within the last six months to a year depending on the market today, as well as what’s currently available.
Understanding the market trends is important, and if it’s a hot market in which things are selling quickly, then certainly your home is going to be worth more. What’s more, by pricing your home correctly, you’ll certainly sell it quicker and for more money.
If you have any questions about selling real estate in general, or if you’re thinking about buying or selling a property, feel free to give us a call. We’d be happy to speak with you.