How to Determine the Market Value of Your Home

There are many ways to find information about the market value of your home. Some are more accurate than others.  Some are more accurate than others. If you are intending to put your home on the market, it is critical that you start with the most realistic pricing.  Here are some ways that you might look for that value.

Colorado Springs, CO  August, 2018

One place to start is online websites like Zillow.  Many people turn to Zillow’s “zestimate” for the market value of their home and track it on a changing basis. Although Zillow can be accurate at times, most of the time it is not an accurate resource. Zillow and other online sources only have some information about your home and the homes around it.  They use various sources to compare and adjust your home to those around you. If some of their information is either incorrect or incomplete, the value they come up with will also be incorrect. Often times it is incorrect by a substantial amount, either to the positive or to the negative. Zillow and other online sources can be quick and easy ways to get a bird’s eye view of whether your home value is going up or going down but not a good picture of the actual market value.

Another resource for value in the tax assessor.  Your property tax bill can create a common misinterpretation of value.  One of the labels on the assessor site and your tax bill is “market value”. This is a confusing and inaccurate label for that figure.  I’m not a fan of the assessor’s office using that term because it gives property owners and consumers a false perception. Some buyers will go to the assessor’s records to look up that figure before making an offer.  That number is established by the assessor every two years when they do a reevaluation of properties and adjust based on the market during the most recent time frame. They have not seen the inside of your home. They have not seen the inside of the surrounding homes. The figure they are using is most often low compared to what the actual market will bear if your home is for sale.  In some cases, it can be off by very large amounts. If it seems too high, you should dispute the valuation.

If you have done a refinance recently, you probably received an appraisal as part of that process. It seems that any appraisal would give you a current market value for your home. Unfortunately, that is not the case.  Appraisals done for different purposes can result in very different perspectives on the value of your property. A refinance appraisal is almost always skewed to the highest end of the value and possibly more than your home would sell for.  Even an appraisal done to price your home for sale can be inaccurate because it does not take into account the movement of the market going forward. An appraisal done a month or so ago doesn’t have the ability to move with the shifts in the market.

The best and most accurate source for a Current Market Valuation of your home is to contact a real estate professional who specializes in your area and knows it well. They can provide you with data for the past three to six months of sale activity.  It’s important to review the homes that are most like yours in every possible way. If you have a two-story home you should not compare it to a ranch style home. If you have an unfinished basement you should not compare it to a home with a finished basement. Sometimes those comparisons are necessary due to limited market data. Your real estate professional should be able to help you make value adjustments for those differences. Although your real estate professional has the knowledge and ability to adjust and adapt the comparable sales and active listings, you should be able to clearly see that their recommended valuation is accurate and realistic.  If you cannot clearly see that, then the buyers may not either. Occasionally real estate agents will propose a high price for the sale of your home in order to get you to hire them. Be aware of this when speaking to multiple agents and make sure that you are comfortable that your home is not overpriced.

When I work with my seller clients, we may arrive at a price during our initial discussion. But we may also adjust that price if the house takes a month or more to go on the market. My sellers may be doing improvements, repairs or simply getting things pre-packed for staging.  In our current hot market, property values could increase in that short period of time. We may adjust our starting price from what we originally planned just prior to putting it on the market. Your real estate professional should provide you with information on new listings, under contract and sold homes, as they occur, to keep you competitive with the other homes around you. If you and your agent are not paying attention to the most current market activity, you may fall behind the trends of your area and fail to sell in a timely manner.

In the end, the only determining factor for value is a willing and able buyer interested in purchasing your home at a price that is acceptable to you.  If a loan is involved in the purchase, an appraiser will need to be able to justify the price with actual sold home data for the purpose of the lender. Keep that in mind and discuss that with your real estate professional when pricing your home for sale.

If you have any questions about this information or would like to discuss the value of your home,  please reach out to me as your neighbor and your neighborhood real estate professional.

Vicki Westapher

719.440.0514 cell/text

RE/MAX Properties, Inc.

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