How do you determine your home’s value?
Market Value is as much a perception as it is a number. Location, schools, condition, square footage, number of bedrooms and bathrooms are the main factors in determining value. But there are many other somewhat subjective factors that can affect the way a potential buyer perceives the value of your home compared to others they see.
As a professional Real Estate Agents, we see the market from three angles – the way Buyers see the market, the way Sellers see the market, and the way Agents see the market. We use all three perspectives to get an accurate reading of the market.
How Buyer’s Perceive Value
The information at Buyer’s fingertips online is abundant. One resource that is imbedded into many real estate websites are AVM Systems (Automated Value Matrix), the most popular one being Zillow.com. Websites like Zillow, claim to give you a estimated value of your home, but they are often grossly inaccurate.
Why is this? Zillow “Zestimates” are compiled through a variety of aggregate data to create a value. Zestimates are values based on the trend of the market and may or may not include all actual data and certainly do not include subjective factors like condition, location, etc.
Right or wrong, Buyers view this information as a good gauge for the value of a home. In some situations the Zestimate is higher than the asking price of home, which in a Buyer’s mind translates to a good value. And unfortunately, the opposite is true. A Zestimate may be far lower than the list price of a home, so a Buyer assumes the home is overpriced, when that may not be the case at all.
A Buyer working with a good Buyer’s Agent will review all factors when determining value and will likely be educated on Zillow’s flaws. A Buyer working with a good agent will also consider improvements made to the home, location, curb appeal, layout, design, proximity to roadways and amenities, and even more subjective feelings about the home that also factor into market value. Of course, recent sales comparables and other homes currently available for sale (the competition) will also impact market value. Value is very important – whether perceived or actual!
How Seller’s Perceive Value
The value of a home, as a number of fact, is determined by a licensed Appraiser. If you are buying a home or refinancing your home, the lender will require a licensed appraiser to give their opinion about the home’s value. But Market Value is determined by how much a buyer is willing to pay at any given point in time. And that can’t be determined until an offer is received. Even then, an Appraiser’s opinion will be the final determination.
Seller’s also use sites like Zillow or other real estate agent websites that also use AVM algorithms. Sellers do not realize that many times they are not getting an accurate number, only to be disappointed when a qualified agent tells them the truth. Or worse yet, the seller has a number in mind, that is actually below market value, and an unqualified agent lists and easily sells the home for less than it’s really worth! A missed opportunity for the seller.
How Agents Perceive the Market
Only by seeing hundreds of homes in person and evaluating homes, communities and neighborhoods daily on many different levels, can one truly have the insight to accurately compare and understand the market. There simply is not a button you can press to get the value of a home. There are too many factors involved. And at any given moment in time, it can change.
If you are thinking of selling and you want to come up with an accurate list price, Contact Us, for a free, no obligation market evaluation. We work hard to not only review all of the market data and market conditions, we also work with you to maximize your home’s value before it is presented to the market in order to get you the most money possible.
There are many things you can do to increase the Market Value of your home. If you are thinking of selling, you need to review this list and see how you can maximize the return on your investment!