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Tips To Determine The Market Value of Homes
Going house shopping is a beautiful experience beyond belief, in everyone's life. Just the thought of looking around at several open houses, picturing yourself playing in one of the backyards, cooking in an open kitchen, and just imagining yourself running down quickly from the staircase towards the new marble-topped counters for dinner, sounds impressive right?
Well, it is. House shopping marks a remarkable experience that gets very hard to forget, especially if you are looking somewhere to settle permanently. Anyway, in short, house shopping is quite an exciting and thrilling adventure.
Unfortunately, things not always go the way you plan them, just like life. When people go house shopping online, the chances of getting trapped in a fraudulent activity are still high.
Some realtors turn out to be fake and might end up robbing you of your hard-earned dollars by giving out false information regarding the value of a particular house.
So, I believe it would be a smarter thing to know the value of your home and houses around you beforehand if you don't want to make a fool out of yourself through a bunch of con men.
As a homeowner, you must always be aware of the value of your home, regardless of whether you are thinking about selling it or not. Many realtors are approached by one question the most, and that is how they can determine the value of people's homes precisely.
Hence, this blog is curated for this purpose, as I bring you some essential tips that you must follow in determining the market value of your home.
But before I get into that, let me just briefly explain what is meant by market value in real estate.
What is meant by the Market Value of a Home?
When we talk about market value in real estate, we distinguish it in three classes. The first one is home market value, the second one is home appraised value, and the third one is home assessed value. People mostly get confused among the three.
So, it's very crucial to understand the difference between them because they are all very different. But, let's come back to the crux of the matter, and this is knowing what market value truly is. The market value of a home can easily be described as the price on which a house gets sold on in the open real estate market.
However, there are a lot of methods that can help you determine the fair market value of a home. But we won't be getting into that. Follow the tips given below to find the value of a home.
1. Opt for a comparative market analysis
A comparative market analysis is also known as a CMA, is conducted by a professional realtor at your place. The professional realtor determines the market price by examining recently sold homes in a period of about 6-12 months in a specified area. But while conducting a CMA, it's essential to ensure that it's of high-quality; for this reason, you would need to do proper interviews from realtors.
Keep these following aspects in mind, to ensure your CMA is of high-quality. The houses used for comparison must have similar square footage. The houses used for comparison must be of the same residency, or the style should be similar. The houses used for comparison must have the same number of baths and bedrooms. The houses used for comparison must have undergone some updates.
All of these aspects influence the sale price of a home in one way or another. Also, make sure a quality CMA, when presented to you, is presented in a clean, professional approach, with no mishaps or mistakes.
2. Get yourself a home appraiser
Home appraisers are mainly used for approving mortgages, but little did anyone know they can also be used for estimating overall house value. Appraisers are good at given value-based measurements according to the client's needs, preferences, and requirements.
Apart from measuring, home-based values, it also evaluates the region or city where the home is located or the overall market in short. It also gives out different characteristics of the house with all factors, including sales, costs, depreciation, and vacancies.
After evaluating all these factors carefully, a home appraiser gives out his final estimation.
Things you should never do
1. Look into the price per square foot method
This method not being reliable should never be brought into consideration. This method merely involves taking the sales price of a home similar to yours and dividing it by the number of square feet in the home. Such arrangements should never be used to determine the market value of the home.
The reason behind it is so ineffective is that even though the houses may have the same square foot, the same number of bedrooms and bathrooms, they might not have the same upgrades.
A home undergone even a minor renovation can change the result to varying degrees, so, in my opinion, no matter how much your realtor pushes you towards adopting this method, Don't ever let go of it!
2. Don't use online valuation models
You can always make use of tools online to find out your house's worth. In fact, according to one survey, about 22% of U.S owners measured their home value through online estimators. These estimators have been given a fancy name "automated valuation model" or AVM's. You can easily find these on sites offered by lenders or real estate sites.
These tools give out accurate results by utilizing public records holding crucial information such as documents of property transfers, ownership paperwork including deeds, and tax estimation that helps in predicting the value of your home based on sales conducted recently. But do not entirely rely on these evaluators as they are mainly used for marketing and lead generation purposes.
Once you read this blog, you would know which method to opt for when measuring your home market value. Some of these methods are highly popular but give out poor results. Hence, don't rush things, always do a little research before you head out to measure your home market value.
About the author
Cameron Brody is a professional content marketer with years of experience in creative content writers Content Scribblers. As a core member of the team, he has managed to help many businesses and influences by producing quality content for them. Other than writing, he is also a tech whiz and a gamer who likes to spend his long nights taking down his arch-rivals in the digital universe.
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If you enjoyed this post and have time to spare, why not check out these related posts and dive deeper down the rabbit hole that is homeownership.
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