The million dollar question in real estate that everyone has a different answer for: “How much is my home worth?” Or, “What is the value of my property?” As a homeowner, it is very easy to overestimate your property’s value…because to you, it is worth a lot more than any online platform could calculate based on a criteria of number of bedrooms or square footage. You (unlike anyone else) know that during sunsets on your porch, you get the best breeze and views of the valley, or that the open flowing floor-plan allows you to watch the kids in their playroom while you make dinner. These things, to you, are simply priceless! But, when it comes time to sell you need to place a value on your home that others and the market will agree with.
Everyone has an opinion about the best and most accurate way to gauge the value of your property, but the truth is, there is ALWAYS a margin of error. Every home is different and every opinion is subjective. Each home creates different connections with buyers, meaning they would be willing to pay more or less for things that you just can’t place a dollar value on. Not only that, but the real estate market is ever-changing and home value’s are changing constantly.
Your home is really only worth what someone will pay.
Things to Consider When Looking at comps in Your Area:
- Location – Your home’s value is strongly swayed by where it is located. For example, in a coastal city like Carlsbad in North County San Diego, if there were two identical homes (same square footage, layout, bedrooms, lot size etc.) placed on opposite sides of the I-5, which runs parallel to the coastline, you could be looking at home values varying by $100,000- just because one is closer to the ocean. The best rule of thumb when determining your property’s value is to look at homes in your own neighborhood, or in very close proximity.
- Comparable Homes – Consider what comparable homes are in the location parameters you’ve defined. Consider: number of bedrooms, number of bathrooms, square footage, lot size and amenities, and anything else that may be considered an “X-factor” below.
- Recent Sales – By looking at what comparable homes have been actually selling for in your neighborhood, you’ll have a better idea of what a seller would pay for your home. This is never guaranteed, but can be one of the more reliable indicators. We suggest not looking at listing prices, but instead, what has actually sold recently. Anything under four months should be okay for comparison, but less than two months is even better.
- Price per square foot – Look at the price per square foot of homes recently sold (if they’re similar to yours and in close proximity).
- X-Factors – All homes are different. It’s impossible to build homes EXACTLY the same because there are external factors that you simply cannot control. But, there are certain “x-factors” that you should look for when selecting your comps. For example, is the house in great condition, but not in a good school district? Or, curb appeal: has the interior been remodeled, but the exterior is less than pleasing to the eye? Neighborhood: Is the house in great condition, but surrounded by homes in terrible shape? Noise: Is the house in a quiet neighborhood, or right next to a freeway? Amenities: Does the property offer easy access to walk to shops or restaurants? All of these x-factors will have an impact on the price someone will pay for your property…and they are also things that online value generators won’t be able to consider.
What are Your Options in Finding Your Property’s Value?
- Online platform – we all know how easy an online search can be! With that, there are tons of real estate companies and platforms offering “free property valuation services” that can give you an idea of your property’s price with the click of a button. While this may be a good place to start your research, take the values given with a grain of salt. There will always be a margin of error in property valuating, but this is especially relevant when the source hasn’t physically seen or been in your property. A computer may not be able to take into account things like a great view or a home that has unique upgrades throughout. Some online tools, like Zillow’s Zesimates, have an error rate of 7.9%. Here is a list of online tools people are using to evaluate their home’s worth:
- Bank of America
- Real estate agent – Many homeowners will seek the knowledge of a real estate agent in determining what to list their home for. Agents are wonderful because they can provide an assessment based on what they see, and look beyond the data that a computer considers. If the agent is especially familiar with your neighborhood, that is even better. They often can make better judgement given the nature of your market. The only thing to beware of: some agents will over promise or inflate values in order to get your business, so be sure to vet your trusted agent properly. Agents have an error rate of about 5.5%.
- DIY – You may be reading this and think to yourself “No human or machine will know my property’s value better than I will.” While that may be true in some cases, it can also be the culprit of many failed or delayed home sales. Because we have emotional ties to our homes, and we know what we would benefit from (financially) in selling, our own property valuation is often the most unrealistic and can lead to us pricing it too high. But, if you take all of the tips above about what to consider in selling, and remove your personal bias as best you can, you can come up with a practical valuation. If you’re serious about coming up with the most realistic value, you can even have the home appraised. Granted, you will have to pay the $400 to have this done, but it may save you from having unrealistic expectations about what your home is worth.
When is determining a home’s value most difficult?
It is more difficult to assess your house’s value when it is very unique or lacks similar comps in the area. If your house is different from every other home in the neighborhood, the task of determining its value can be very tricky. You may have the only property in the area that has 5 BD 3 BA, on a corner lot, with a pool. Then what? You can look at neighborhoods nearby, but your comps may not accurately reflect what would happen in your area. Outside of the number of bedrooms or varying square footage, some homes set themselves apart with special amenities (like a wine cellar) or custom woodwork etc. In this case, you can get a rough idea of value from comps, but you really won’t know how sellers will react until you list it.
If you’re in a rural area, then this will also provide a challenge in pricing your home. If there aren’t many homes in the area, you really just have less to compare your home to. In this case, it would be advisable to speak to a real estate professional who is very knowledgeable and familiar with your area, as it may be unique to others.
How Sell Direct Experts Help San Diego Homeowners
Here at Sell Your House Direct, we understand how difficult it can be to read the market and come up with a price for a home. But, our experts are trained in informing homeowners and sellers of all of their options. If you want to chat with someone today, we can talk you through what your neighborhood homes are selling for, and based on the condition of your home, what yours could potentially sell for. Our offer will likely vary from what you would get if you listed it on the market with an agent, but we will walk you through those variations as well. So if you’d like to know your property’s value – feel free to utilize the resources above or simply give us a call and speak with a friendly Sell Your House Direct employee AKA human.Views: 9