What’s My Home Worth
Feb 17, 2017
We know the calendar says February but the Spring Market is here! What does that mean if you want to sell your home? If you want to buy a home? Inventory plays a big role. In basic terms, if there is a lot of inventory, then it’s a buyer’s market because there is a lot for buyers to choose from. If there aren’t that many homes for sale, then it’s a seller’s market. Spring has sprung and this year we find ourselves in a seller’s market. Inventory is low. You will get the best price for your home now. Here’s how we’ll determine that price and answer the question everyone asks, “What’s my home worth.”
Comparative Market Analysis
A key indicator, which is the foundation of pricing, is a Comparative Market Analysis.(CMA) A great real estate agent will do the following:
1. Pull your tax record. We’d like to think that these are absolutely accurate and most of the time they are, but on the off chance that something isn’t right, we want to make sure we catch it.
2. Look at Assessed Value Remember, this is determined by an assessor, pulling the tax record and making sure the house is still standing. An assessor, unlike a bank appraiser, never goes inside. This number is a basic number to serve more as a bottom line to determine your taxes.
3. Analyze properties that have sold in the area in the last 3 months. We are looking for properties that are similar in style, square footage, age, and within a certain mile radius. The closer the better!
4. Research the properties that have recently gone under contract. The reason why it is so crucial to use a Realtor is because of their expertise in analyzing numbers and because of the access they possess to current information. Third party sites like Zillow and Trulia pull their information from tax records that aren’t always accurate, or that are updated only once a year.
5. Consider similar properties that are currently for sale. While you don’t really know what a buyer is willing to pay until there is a contract on the home, researching other similar properties that are for sale will help determine what the competition is.
6. Determine the impact of upgrades. Have the owners kept up with the maintenance of the home? (furnace, windows, roof) Have they made any changes to the decor to reflect current trends? (painted, remodeled the kitchen or bathroom, updated the landscaping and exterior) While it is next to impossible to get all your money back on renovations (depends on what type of the market it is) at the very least, upgrades add additional value to the property above and beyond the assessment.
7. Understand the Motivation of the Seller. Depending on the time frame of the seller, it is often best to price the home to sell rather than to test the market and hope. If taking a lower price means you won’t have to move twice, it might be worth it.
Accurate pricing is essential for both the buyer and the seller. Fair market value means just that, it’s fair and reflects current sales, the competition, upgrades, and assessments. Those who are selling a home need to see the bigger picture. Over priced homes stay on the market much longer. Those who are buying a home need to understand that’s it’s okay to give a seller exactly what they are asking once you determine the price is fair.
Even if a move is not in your future, it’s still a good idea to have a CMA done on your house at least once a year. After all, for most people, your home is your biggest investment, and knowing its value can be helpful in determining whether or not refinancing is a good idea or in applying for a home equity loan. Keeping on top of your credit score is also important. We work with some great mortgage professionals who can help you understand your purchase power in terms of a mortgage, refinancing or home renovations.
If you have any questions or would like to help in determining what your home’s value is, contact us today! It may be worth more than you know!
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