We recently received an email from a former client. He’s considering selling his home and, like many home sellers do, he went online to see if he could figure out how much the home is worth.
“The online report values my home at $325,000,” he writes. “Yet, one of my neighbors recently sold his home, which is almost identical to mine, for $365,000.”
He went on to say that he is quite confused about the home-pricing process and wondered if we could help him out.
First, the online real estate portals offer only “estimates” of a home’s value. They are automated and have never seen your home or any other home for which they determine an estimate. They are an okay place to start.
It’s all about market value
One thing Mark got right is that he understands that the price he sets for the home should reflect its current market value.
The only way to know what that is – what a willing buyer will pay to a willing seller for a home like his – is by figuring out what they’ve paid for similar homes in the recent past.
This means we need to look at sales prices of similar homes. And, there’s more that goes into determining if a home is comparable to yours than meets the eye. We look at the same criteria that professional valuers do.
- The age of the home:
Sold homes that are within a few years (either side) of the year built of your home.
- The size of the home:
Yes, we look at the sold homes’ square measurements, but the number of bedrooms, bathrooms and living also plays a role in determining market value.
- The home’s location:
We try to find sold homes in close proximity to the subject property, but will consider a wider range, if necessary. The location within your particular neighborhood may also impact its market value. Factors such as a main road versus a quiet neighbourhood street are considered.
- Upgrades, amenities and condition: We’ll compare your home to the sold homes with an eye toward any upgrades or improvements performed, whether similar amenities are offered and, most important, how the condition and presentation of the homes compare.
- Other factors include:
- Vehicle parking or storage
- Upgrades to kitchen & throughout
- Quality of fixtures and fittings
- Size of the Land and its features
- Style of residence
- Outdoor features
- Anything unique or special about the property, were some of the comparables sales a ‘forced’ sale? how was their upkeep inside? and so on.
Next, we’ll do the number crunching to determine if your home is worth more or less than the sold homes.
What will the Valuer say? He or she, after all, has the final say in how much your home is worth in today’s market. No lender is going to approve a loan for more than a property is worth.
This is why we are so thorough in our determination of the appropriate price for your home. An inaccurate evaluation on your agent’s part can lead to a failed real estate transaction, just when you thought it was a done deal.
The valuer will visit your home to perform a valuation. He or she will likely take photos while in the home. The valuer will also consider the home’s landscaping, location, structure and even appliances.
The inspection process can take anywhere from 20 minutes to a few hours depending on the size and details of the property.
If you hire an experienced listing agent, the suggested sale price should match or come very close to the valuers’ value of the home. This is why it is so important to interview more than one agent for the job of selling your home.
What is The Difference Between a Property Valuation and an Appraisal?
A Sworn Valuation is carried out by a Licenced & certified Property Valuer. It can be arranged by the lender to assess that the property value covers the loan amount. It can be arranged by sellers to settle an estate, for separation or other reasons.
The Valuer must report on the facts, as they are legally responsible for the information they provide. Severe penalties apply if the Valuer attempts to mislead. The comprehensive Valuation report can be relied upon in court if necessary.
An appraisal, however, is the real estate agents’ opinion of your property value. Usually when trying to gain your listing.
They base their appraisals on other sales in the area and their experience. Remember, real estate agents are working for the vendor (which could be you) who pays the commission on the price they actually achieve, not the official valuation.
The difficulty with comparing appraisals is that some agents simply ‘bid’ the highest price which may have nothing to do with real value or that a buyer is likely to pay.
So, here’s a warning… don’t just fall for being told the highest price. It’s flattering, but may not be true. You can read more here.
These use computerized modeling and have some credibility as even the banks use them for desktop valuations… yet, we’ve found these computerized Reports can vary as much as 20% from real worth!.
So, for an accurate idea of value, call us on 08 83061100.
Got questions, comments or feedback? Email [email protected]
To find out more, you’re welcome to call 08 83961100 to arrange a chat with people that care.
Alternatively, Book a Free Consultation or Get Your Home Value Here. We’ll Guide You Home!
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Like most things in life, these are recommendations only. It is not legal advice, it may or may not suit your own circumstances and you may need to make your own additional enquiries.
Regards Eriks & Team Plaza Real Estate