Kathy Craig's Blog
Ever wondered what the market value of your home is? Or what the market value would look like for your dream home? If you’ve done a quick Google search you’ve probably come across at least a handful of websites offering tools to help you determine the value you on your own. But the numbers these tools put out should always be taken with a grain of salt. Calculating a home’s value is a complex calculation taking more than just hard data into account. And that’s where your real estate agent comes in with the information you need to know that an online tool couldn’t possibly obtain.
The first thing you should know is that the market value is not a number set in stone. It’s also not a number that is reached from purely quantitative data. This is because market value is what buyers are willing to pay for a home and there are so many qualitative factors that go into this decision. Factors a computer can’t find or determine on its own and that usually require someone local who has extensive knowledge of the area.
Someone like a real estate agent! An agent is well versed in selling homes in the area and connections to the community. Agents also have access to a database that stores information from all the local home sales to use as a jumping off point when calculating the home value.
So this isn’t a hard and fast rule that necessarily goes by the book. While homes that have sold with similar features as yours are part of the equation they aren’t the whole picture. So yes, the number of bed and baths in your home, amenities, recent updates, the overall condition of the home, location, and age of the house will all be carefully considered this is just a piece of the bigger picture.
Factors such as current market conditions, how many other houses are on the market, and the various reasons why nearby homes have sold are a few factors that can make an impact on your home value. Afterall, you don’t want to underprice your home based off of other homes that have sold at a lower price point to attract buyers fast or overprice for your neighborhood based on what you feel your home is worth.
Lenders want to ensure the home is selling at or above the market value so getting the price right will ensure a smoother buying process for potential buyers. However, if a property is on the market for longer than 30 days, which happens often to those that are overpriced, buyers start to wonder why. They may avoid your home as a possibility. In this scenario, sellers often have to significantly drop pricing, often below market price, to attract potential buyers.
Real estate agents are truly the best source for all of this information. They can perform what is called a competitive market analysis (or CMA). We have access to resources third-party websites and DIY-appraising just can’t access.