Determining a Home's Value
Determining a the value of a home can be difficult. Buyers, sellers, agents, and appraisers all have opinions but how do you know what a house is really worth in the current market? This is a good read for both home sellers and home buyers regarding the value of a home!
Many homeowners have their own opinions based on how they feel about their homes and their own system of evaluation. Some check online evaluation services and this can be very misleading.
The truth is the value is determined by what a buyer is willing to pay on the open market. If the buyer is using a mortgage then the value may also be determined by an appraiser working for the lender. Appraisers use data based on past sales. Appraisers use an arms-length (unattached) evaluation of facts to arrive at the value.
Here are examples of items do NOT factor into a home's value:
- What the owner paid for the home.
- How much the owner owes on the home.
- What the tax assessor says.
- What Zillow or other online estimators say.
- The actual dollars the owner has put into maintaining the home.
- How many bills the owner wants to pay off with the proceeds.
- How much the owner will have to pay to buy a new home or needs for retirement.
- Improvements the owner made that were overbuilt for the neighborhood
- Finishes suited to the owner's personal taste (think wallpaper)
- How many compliments the owner has received from friends and family... unless they those people are buying!
- How much the owner values it and loves the home.
- The good times and memories the owner has made while living in the home.
A good local real estate agent can give you an evaluation of the real value of your home. Agents & REALTORS use many of the same basic steps of comparing homes to closed homes that appraisers do but local agents also know trends and evaluate what is happening in the neighborhoods. Full-time, local agents have local experience. Listen to the recommendation of your local agent.
Are you wondering what DOES factor into the value of the home? Contact me now for a list!
You may also be interested in:
- How can you correctly price your home for sale?
- Three Main Factors for Determining Real Estate Comps
- 10 things that may Negatively affect your Home's Value
- Perceived Market Value vs Appraisal Value in Low Supply, High Demand Markets
- Getting the Maximum Appraisal Value for Your Home
