Considering the press lately regarding do-it-yourself real estate sales, it is worth studying up on how the market value of your home is determined.
Most people have a rough number when asked what their home is worth. It is often determined by neighbourhood heresay or surfing the internet.
Consider: how important is it to know the value of your highest asset? And what are the consequences of you being wrong?
Although there is no set way of determining the value of a home, there are a few things that help narrow the price range down:
- Recent comparable solds: Your home is worth what a buyer will pay for it. Analyzing solds in your area of similar homes can give a good foundation for value.
- Expireds: Expireds are considered homes that have not sold. For one reason or another, the buyers determined that they were not willing to pay for that property. Examining what didn’t sell and why can give insight into the buyer’s mind in your neighbourhood.
- Currently for sale: In the real estate world, what is on the market now is really a fantasy price. It doesn’t necessarily indicate what buyers are willing to pay, but it will show what homes yours would be competing against. Determining market value is partly about making your home more compelling for the buyer. How does it compete?
- Improvements: Not all improvements to a home affect the value. Some will just allow it to sell in a neighbourhood that has a slow turn over. You will need to separate pride of ownership from investment realities. There is a simple charted estimate that can illustrate the possible return on the improvements you have made.
- What Ifs: Understanding what is going on in your neighbourhood is important when considering value. You might be buoyed by the possibility of double digit price increases that the media is highlighting. However, not all neighbourhoods fare the same in a hot market. You will need to add that flavour to the price range you can expect for your home.
As a realtor, I offer free market evaluations to show you the current value of your home. This can help with relocation decisions that you might be making.