We recently received an email from a former client. He’s considering selling his home and, like 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, the
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 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 plays 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 compare.
Next, we’ll do the number crunching
to determine if your home is worth more or less than the sold homes.
WWTAS?
What will the appraiser
say? He or she, after all, has the final say in how much your home is worth in
today’s market. No lender is going to approve a loan for more than a property
is worth.
This is why we are so
thorough in our determination of the appropriate price for your home. An inaccurate
evaluation on your agent’s part can lead to a failed real estate transaction,
just when you thought it was a done deal.
The appraiser will visit
your home to perform an inspection. He or she may or may not take photos while
in the home. The appraiser will certainly consider the home’s landscaping, “location,
structure and even appliances,” according to the pros at LexurAppraisal.com.
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 hire an experienced listing agent, the suggested list price should match or
come very close to the appraised value of the home. This is why it is so
important to interview more than one agent for the job of selling your home.
