What’s Your Home Actually Worth? | Just Livin' Realty Group

Discover What Buyers Will Pay in Today’s Market

Consider a scenario where you want to sell your house now. The first thing that you should do is to determine the dollar value of your home, a task far more complex than looking up your bank balance and how the current value of your investments in stocks and securities.

Take a moment to review the video below, we discuss three different values that can determine how much your home is worth. When selling a home quickly we need to analyze the property so that we can have a strategic plan to get your property sold quickly.

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The best way to sell a house is to price it correctly when you put it on the market. Fix too high a sale price and your property will sit on the market for ages. Similarly, the quickest way to sell a house is to fix a cost on a lower scale. However, in such cases, you lose out on lots of money and nobody wants that!

Knowing the worth of a home is not for sellers only. Buyers too must evaluate the value of a property before making an offer as they would not want to overpay for it.

You don’t need to be a buyer or a seller to assess the value of a property. Even if you presently own a home, you would like to keep track of its worth year after year to know about the market trends in real estate. Hence, if you ever want to sell my home in the future, you will know precisely when to take the plunge.

The good news is, a trained real estate agent—who understands the nuances of your particular neighborhood—can determine the true market value of your property … and at no cost to you!

THE THREE TYPES OF HOME VALUES

Whenever you get into a real estate deal, whether as a seller or a buyer, you will learn about how a property is assessed and its worth arrived at. Typically, there are three metrics in property valuation – appraised value, assessed value, and true market value.

We will now analyze each of these three in detail so that you can make better-informed decisions when you buy or sell my home.

Appraised Value

The appraised value of your home is the worth fixed by a professional licensed appraiser. Generally, appraisers are required by a lender when a mortgage loan is being sanctioned, and knowing the precise value of a property becomes critical for the lender. However, appraisers do not work for lenders as they give independent valuation of a property without bias towards any parties, irrespective of who is paying their fees.

An appraiser’s valuation is an assurance to a lender that the amount sanctioned is not at risk and over the worth of the property. An example will clarify the importance of the appraised value better.

Suppose you list your property at $400k when you sell your house now and arrive at a deal with a buyer at $375k. However, if an appraiser fixes the worth of your home at $325k, a lender will sanction a mortgage loan only to the extent of the appraised value.

Several factors are pivotal to arriving at the appraised value. These include comparing prices of similar properties in the neighborhood, square footage, upgrades, appliances, improvements, and the condition of the interior and the exterior of the house.

Assessed Value

Unlike an appraiser, the assessed value is determined by the local municipal property assessor to arrive at the property taxes payable each year. The higher or lower the assessed value, the more or less the property tax that you have to pay.

This assessed value becomes very important when you sell your house now. Potential buyers do not only check the sale price but other expenses too like maintenance, property taxes, insurance, and more. The assessed value makes it easy for them to decide whether to invest in your home or not since it is a recurring yearly outgo.

The method of arriving at the assessed value is not much different from the appraised value. The assessor will compare similar homes in the neighborhood and their values, age, location, overall condition, and improvements and upgrades. However, this information is an estimate only and not precise as assessors do not have unlimited entry to your home.

On the other hand, the appraised value is more accurate as it is required by lenders to sanction mortgage loans. Appraisers must be provided wide access so that buyers can be sanctioned a fair quantum of loan. This is necessary to find the quickest way to sell a house.

Assessments are done annually to determine how much property tax you owe. Many counties use a multiplier (typically between 60%-80%) to calculate the final assessed value. So, if the assessor determines that the value of the home is $300,000, but the county uses a 70% multiplier, the assessed value of the home would be $210,000 for tax purposes.⁴

If your assessed value isn’t as high as you envisioned, don’t sweat it. Many homeowners appeal their assessment in favor of a lower valuation so that they can save money on property taxes. If you’re interested in appealing your property tax assessment, let us know. We offer complimentary assistance and would be happy to help you build your case.

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True Market Value

True market value is established by your real estate agent. It basically refers to the value that a buyer is willing to pay for the property. A good real estate agent is an expert in determining true market value because they have hands-on experience buying and selling properties. They understand the mindsets of buyers in your market and know what they’ll pay for a desirable house, townhouse, or condo.

As a seller, knowing your true market value is important because it helps you choose how much to list your property for. It can also help you decide if you want to make any improvements to your home before putting it on the market. Your agent can help you figure out which updates and upgrades will have the biggest impact on your true market value.

WHAT’S THE DEAL WITH ONLINE CALCULATORS?

When figuring out your home’s value, you might be tempted to see what popular real estate sites like Zillow, Redfin, and Trulia have to say. When you use an online calculator to determine your home’s value on these sites, it is just an estimate. It’s not an actual appraisal or the “true market value.” These sites all have their own algorithms for coming up with their estimates. For example, Zillow comes up with their “Zestimates” by calculating “public and user-submitted data, taking into account special features, location, and market conditions.” ⁵

These online estimates can be a great starting point for opening up the conversation with your real estate agent about your home’s worth. But even Zillow recommends that you use a real estate agent for coming up with the actual market value of your home. The site says that once you get your “Zestimate,” you should still get “a comparative market analysis from a real estate agent.”

Having an agent involved in this process is essential because they understand the market better than a computer ever could. They’re showing property in your city every single day, and they know the particular preferences of buyers and sellers in the area. Young professionals, large families, empty nesters, and other groups are all looking for different things in a home. A local agent has most likely worked with all of them, so they understand what every segment in your market is specifically looking for.

HOW AN AGENT FINDS YOUR HOME’S TRUE MARKET VALUE

So, how does an actual real estate agent determine true market value? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:⁶

Neighborhood sales – Your agent will look at similar, recently sold homes in your neighborhood to see what they sold for and what they have in common with your house.
The exterior – What does your home look like from the outside? Your agent will factor in curb appeal, the style of the house, the front and backyard, and anything else that impacts how the house looks to everyone walking and driving by.
The interior – This is everything inside the walls of the house. Square footage, number of bedrooms and bathrooms, appliances, and more all influence the overall market value.
Age of the home – Whether you have a newer or older home affects the number your agent comes up with as part of their assessment.
Style of the home – The style of your home is important because buyers in different markets have different tastes. If buyers prefer ranch-style homes and you have one, then your home may sell for a premium (aka more money!).
Market trends – Because a local agent has so much experience in your market, they have their finger on the pulse of your area’s trends and know what buyers are willing to pay for a property like yours.
Location, location, location – This one’s probably the most obvious. Your agent will think about how popular the area is, how safe it is, and what schools are like.

A computer algorithm simply can’t take all of these factors into account when calculating the value of your home. The reality is, nothing beats the accuracy of a real estate agent or professional appraiser when it comes to determining a home’s true market value.

YOUR AGENT IS THERE EVERY STEP OF THE WAY

Determining a home’s true market value is a real estate agent’s forte. If you’re a seller, your agent will help you find your home’s market value so you can list it at the right price.

For buyers, your agent will help you determine the value so you can come up with a fair offer. Your agent can also set up a personalized home search on the Multiple Listing Service (MLS) for you so you’ll receive emails of listings that meet your criteria. This will help you see what’s out there in your city and how properties are being priced.

Get a Complimentary Report With Your Home’s True Market Value

Curious about your home’s true market value? Call us to request a free, no-obligation Comparative Market Analysis to find out exactly how much your home is worth!

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