March 7, 2022
EVALUATING YOUR HOME
How do you estimate the value of your home and why does it matter?
Estimating the value of your home is not a one size fits all formula. There are a lot of different factors that go into determining the value of a home such as:
- Size – is your home typical of others in the area or is your home smaller or larger?
- Location – are you near schools, shopping, or other amenities?
- Neighborhood – is your neighborhood an up-and-coming area, is it well established, or is it in a more or less preferred area of your city?
- Updates – if the home isn’t new, have any updates been done such as new furnace, roof, painting, or other interior renovations?
- Age – how old is the house and are there any issues as a result of its age?
- Features – does it have anything other homes in your area don’t, or are you missing some features others in the area commonly have?
- Current market conditions – what is happening in your region? Is it a buyer’s market with too many homes for sale, or is it a seller’s market with low inventory and a lot of potential buyers?
Do It Yourself Estimate
If you’re prepared to tackle the evaluation and determine on your own what the home is worth, there are a few things to look at.
- What are comparable homes in your area selling for?
- Are they bigger or smaller than your home?
- Are they in better or worse condition than yours?
- Do they have something you don’t that will attract buyers?
- Do you have features that set you apart from the competition?
This is the least certain method of evaluating the value of your home as you don’t always have all the information real estate agents or appraisers will look at when comparing your home to others. Use some online value estimator tools to get a ballpark estimate and see how it compares to what you thought.
Free Market Evaluation
Nowadays, most real estate agents offer a free market evaluation as a way of getting your business. Most will do a full Comparative Market Analysis to look at what similar homes are selling for, how long sales are taking, and how the sale price compares to the listing price. And since they have access to all of the neighborhood listings and sales information, they can prepare a (usually) fairly accurate valuation of what you may be able to sell your home for.
If you are thinking of going this route, talk to more than one realtor to make sure you are getting consistent information.
Real Estate Appraisal
For a few hundred dollars, you can have a full real estate appraisal completed by a certified appraiser. And although you’ll be out of pocket on the front end, you may be able to get more than your money back when you sell.
Real Estate Appraisers are highly specialized professionals who take a much deeper dive than either yourself or a real estate agent will. They look at, among other things:
- Where the home is located;
- Condition of the utility services and fixtures;
- The foundation of the home;
- What condition the heating and air systems are in, as well as walls, windows, doors and appliances;
- Special features such as fireplaces, pools and hot tubs; and
- Signs of damage to the home or structural foundations or if there are any issues in the attic or basement.
- All other features, fixtures and equipment in the home and on the property.
Why it Matters
Whichever route you choose to evaluate your home, make sure you are comfortable with the methods used to arrive at the listing price. If the evaluation is too high, you’ll lose potential buyers who don’t see the value. If the evaluation is too low and you list the home too low, you may lose out on thousands of dollars on the sale. On the flip side, and in a seller’s market, if you list a little bit lower than the actual value, you could end up with multiple offers and still come out ahead of where you wanted to be.