What's my home worth? How is my home's value determined? These are two questions we get all the time from people interested in selling, and from buyers who want to make sure they are making a good offer, that's neither too high nor too low.
Your home's value is set by the market place. So what the heck does that mean?
There are several factors that enter into the value of a home. One of the most important is the sales of similar homes within a reasonable distance of your home. Closer is always better and a more recent sale is better than one that's older. In fact, sales over a year old are rarely if ever used. In looking at recent sales, Realtors and appraisers both look for the closest match to your home as possible: the same number of bedrooms, same number of bathrooms, same size, same age and so on. The reason is quite simple: the more adjustments that need to be made between your home and ones that have sold in your neighborhood, the more chance for errors.
Similarly- we all hear stories and read about the changing real estate market. That's why recent sales are always looked at first in setting your home's value. For example, in the first half of 2013 there were many neighborhoods where home values appreciated by 20% to 30% or more. So a home worth $100K on Jan 1 2013 was worth $130K on June 1 2013. Obviously, if a Realtor or appraiser looked at home sales great than 6 months ago in that market, they would undervalue the home significantly. So recent sales are always looked at, if there are any.
OK you say, but my home is a lot nicer than the one that just sold across the street. BINGO! That's precisely why a good home valuation requires physically looking at your home and all its features. Yet, the recent sales of similar sized homes in your neighborhood will set boundaries on the value of your home. If you've ever heard of someone over building, or over enhancing their home for the area, this is exactly what they are talking about.
In addition to sales information, Realtors look at what's currently for sale as well. Homes for sale are in competition with each other for buyers, and buyers are looking for the best value for their dollar.
According to recent buyer surveys by the National Association of Realtors, buyers look at between 8 and 20 homes before buying. So they have a good handle on the value of homes. A good realtor can help you do the things to your home, so it stands out as a real value in the eyes of buyers. Even things like the smell in your house can have a big difference - smoke smell and pet smells are a huge turn off. And great smells from pure essential oils and natural cleaners can enhance the desirability of your home.
So, What's My Home Worth? Is an easy question to ask and involves a lot to answer well. Hopefully this gives you an idea of what's involved in determining the current market value for your home.
Of course if you just want a rough idea of your home's value, there are several onine home valuation tools. One we use that is pretty good can be found at http://www.FreeCurrentHomeValues.com
Enjoy!
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