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Determining The True Value Of Your
Home
Pop quiz:
What best determines the true value of your home?
a) A
potential buyer for your home
b) The
internet
c) A formal
appraisal.
Of course,
it’s a trick question. If you answered none of the above, you’re
correct. Before we reveal the answer, let’s look at why potential
buyers, the internet, and appraisals aren’t the best way to determine
your home’s value.
Potential buyers.
Although it’s somewhat true that your home is worth as much as someone
will pay for it, that’s not a realistic determination of value. If your
home is listed on the market for $350,000 and a potential buyer offers
you $450,000 for it, does that mean your home is worth $450,000? It’s
possible, but not likely. Potential buyers can determine the actual
selling price of your home, but not necessarily the value of
it.
The
internet.
Popular internet sites such as Zillow.com have allowed potential buyers
the freedom to browse thousands of homes and see all sorts of
information including estimates of a home’s value. However, if you
compare the estimates for recently sold homes with what those homes
actually sold for, the estimates aren’t correct; only 65 percent of
homes listed on Zillow sold at a price within 10 percent of the
estimate. The main reason for this discrepancy is that much of the data
available for homes is either incomplete or incorrect.
Appraisals.
Because an appraiser thoroughly analyzes all aspects of your home, an
appraisal will give you a fairly realistic idea of how much your home is
worth—much more so than the internet or potential buyers. However,
despite the detailed and accurate nature of an appraisal, an appraiser
relies mainly on past sales data. An appraiser determines a
home’s value based on actual sales figures. Unfortunately, this method
leaves out other considerations such as the list price of current homes
for sale and current market trends.
Now back to
our pop quiz. Who or what best determines the true value of your home?
As you may have guessed by now, the answer is...your real estate
agent. Agents have all of the experience, knowledge, skills, and
tools to accurately assess your home’s value: Completive Market
Analyses, knowledge of real estate trends past and future, current sales
data, average time on the market, list price information, and more.
So, when
you need to determine the true value of your home, the first—and
only—call you’ll need to make is to your real estate agent. ∆
Source of Zillow sales
figures/percentages: CNN.com |
