Cleveland Home Buyer Tip - What's This Home Worth?
Home buyers in the Greater Cleveland, Ohio marketplace will ask me when they are inside a home we are touring and ask:
What's This Home Worth?
My answer usually is: I have no idea. Sometimes, I have a general idea, but I would never spout off at the mouth until I have done a variety of tasks to see if my general sense is mirrors the reality of the market for this home, neighborhood, community, trends, and the like.
There are many things a good Cleveland buyer's agent will do before answering this question. A few tasks a good buyer's agent should do are:
- Look at recent sold comparables and do some adjusting to bracket a reasonable range
- Determine how long the property has been on the market (including periods where it has been taken off and put back on)
- Determine if this is a distress sale (negative equity - short sale)
- Obtain the property disclosures, tax, legal and review in detail. Unresolved water intrusion, etc.
- Verify age of major system components (roof, windows, appliances, furnace, AC, H2O, well, septic, etc.)
- Depending on the property/location/etc., some optional tasks are: Homeowner's Association Rules, Condominium (rent vs. own %, FHA Approved, lawsuits, adequate reserves, etc.), zoning, rural (mineral rights, royalties, gas/oil wells, etc.)
- % of distress sales in the immediate area and how that factors as competition
- Motivation of seller
- Motivation of buyer for this single property
- Corner versus interior lot
- land sloping towards the home
- Major electrical overhead lines nearby
- External noise
- Mixed-use zoning adjoining
- hazardous substances: lead, mold, asbestos
- Local Point of Sale (POS) municipal inspections - passed, failed, status?
- Current market trends - increasing, flat/stable, declining
- absorption rates
- months of housing supply
- Functional obsolescence
- Design implications for resale
What is not relevant is:
- What Zillow or any other automated valuation model (AVM) algorithm says this property is worth. How do you think Zillow or any other AVM knows how to include the above bullets in their analysis -- the short answer is, they don't.
- What your father, mother, brother, sister, aunt, uncle, friend, relative who is a REALTOR in another market/state says this home is worth.
In short, you need to decide, after evaluating the above in concert with your agent, what this home is worth to you. Here is a companion post from the seller's point of view when it comes to pricing a Cleveland Ohio home for sale.