We recently received an email from a former client. He’s considering selling his home and, as many home sellers do, he went online to see if he could figure out how much the home is worth.
“Zillow values my home at $325,000,” he writes. “Yet, one of my neighbors recently sold his home, which is almost identical to mine, for $365,000.”
He went on to say that he is quite confused about the home-pricing process and wondered if we could help him out.
First, online real estate portals offer only “estimates” of a home’s value. They have never seen your home or any other home for which they determine an estimate, so they are rarely correct.
It’s all about the market value
One thing Mark got right is that he understands that the price he sets for the home should reflect its current market value.
The only way to know what that is – what a willing buyer will pay to a willing seller for a home like his – is by figuring out what they’ve paid for similar homes in the recent past.
This means we need to look at sales prices of similar homes. And, there’s more that goes into determining if a home is comparable to yours than meets the eye. We look at the same criteria that professional appraisers do.
- The age of the home:
Sold homes that are within three years (either side) of the age of your home.
- The size of the home:
Yes, we look at the sold homes’ square footage, but the number of bedrooms and
bathrooms also play a role in determining market value.
- The home’s location:
We try to find sold homes in close proximity to the subject property but will consider a wider range, if necessary. The location within your particular neighborhood
may also impact its market value.
- Upgrades, amenities, and condition: We’ll compare your home to the sold homes with an eye
toward any upgrades performed, whether similar amenities are offered, and, most important, how the condition of the homes compares.
Next, we’ll do the number crunching to determine if your home is worth more or less than the sold homes.
What kind of opinion will the valuer give? In the end, it is up to him or her to determine how much money the current market is willing to pay for your property. No lender is going to agree to make a loan that is for a greater amount than the value of the property.
Because of this, when we determine the suitable price for your home, we make sure to do a lot of research first. Just when you thought the real estate transaction was going to go through without a hitch, it could fall through because your agent made an erroneous assessment of the property.
The appraiser will come to your residence in order to carry out the inspection. It is possible, but not guaranteed, that he or she will snap photographs while in the house. According to the experts at LexurAppraisal.com, the home appraiser will definitely take into consideration the home’s landscaping, as well as the “location, structure, and even appliances.”
The inspection process can take “anywhere from 20 minutes to 3 hours depending on the size and
details of the property,” according to Rachel Guthrie at GoHomeside.com.
If you select a competent listing agent, the appraised value of the home should either exactly match the advised list price or come very close to matching the suggested list price. For this reason, it is extremely necessary to have interviews with multiple real estate agents before selecting one to handle the sale of your home.