How do I find my true house value?
When deciding to sell a home, many homeowners’ first question is what their home is worth. At the end of the day, your home’s value is what a buyer would be willing to pay for it – no more, no less.
To pinpoint that number, there are a few different strategies:
Get estimates from real estate agents
Your local realtors know the market better than anyone, and have access to a wider range of data than you do, so don’t hesitate to ask! Agents can pull a comparative market analysis, or a CMA, for their clients without even leaving their office, so call around and get a couple different CMAs.
SetSchedule CEO Roy Dekel recommends bringing in three agents, each from a different brokerage, and asking them at what price point they would list the home. Keep in mind that different agents will approach the pricing differently – some may inflate the price in hopes of netting a bigger commission, while others may be more competitive with the price in hopes to sell faster.
By getting opinions from three different realtors, you can then take the average of the three numbers, and use it as a starting point.
Scope out the “comps” in your neighborhood
In real estate lingo, “comps” are the comparable homes in your area that have sold within the past six months. Look for properties that are similar in age, size, lot size, roof type, amenities and style. Don’t just assume that if a home has the same square footage that it will be valued similarly – if that house is decked out with state-of-the-art appliances or granite countertops, it will be sold at a higher price than a home with the original fixtures and laminate surfaces. Once you have a handful of “comps” to scrutinize, you can see some of the trends (ie, are the ones that sold recently selling for higher or lower amounts? What amenities do these homes have in common, and how do they affect the price?)
The good news is that the sale prices of comparable homes will give you the best idea of what houses in your neighborhood are going for. Again, the market value of your home is determined by how much a buyer would pay for it – not how much you paid five years ago.
Check out online tools
Technology has overhauled the traditional real estate methods, offering more information at buyers’ fingertips than ever. By hitting the Internet, you can have instant access to several methods of determining the value of your home, although there is some debate as to how accurate these tools can be.
Some resources that are available include:
- Zillow: The pioneer of home value estimators, Zillow’s “Zestimate” tool has recently come under fire for potentially under-valuing homes and creating an inaccurate picture of how much a property is worth; however, it’s still one of the most popular resources for sellers and buyers.
- Redfin: Another popular online real estate destination, Redfin immediately shows you the listing information for the exact comps used to determine the value of your home.
- Chase Home Value Estimator: Chase’s tool gives you more opportunities to customize your home information, which allows you to estimate the added value of different home improvements you’re considering. It also provides data on recently sold homes and neighborhood trends.
- Bank of America Real Estate Center: This tool offers a range of values, sale price histories, graphs, as well as a list of comparable properties.
Despite the wealth of information available, the final word on a fair listing value of your home will come from a local realto who is familiar with your neighborhood. A real estate agent can advise on your area and how it compares to other regions nearby, and give you a more personally tailored recommendation than any computer crunching numbers based on square footage alone. Consult with a trusted REALTOR to determine the value of a house before you settle on a final number.