As a consumer it is easy to look up how much money you have in your checking/savings account, bring up your investment portfolio or even the real-time value of your stock account. But determining the value of a home is more difficult.
As a seller, understanding your home’s current value helps you price it correctly when it comes to listing. Pricing your home too high, may result in the property sitting on the market for a long time. But price it too low and you may be losing out on loss equity of the home. For buyers, it’s important to know a home’s current value before you make an offer. You want your offer to be competitive, without overpaying for the property.
Even if you’re not a buyer or seller at the moment, as a current homeowner you might just be curious about the value of your home. Keeping track of your home’s worth annually helps you understand the trends in your market. When you are ready to sell, you can take advantage of a good window of opportunity.
The good news is, a trained real estate agent like me, who understands the nuances of your particular neighborhood, can determine the true market value of your property at no cost to you!
When you start the process of buying or selling a home, you’ll frequently hear the words appraised value, assessed value, and true market value,it’s important to know the difference between each one so you can make better, informed decisions.
A professional appraiser is in charge of determining the appraised value of a home. These appraisals are typically required by a lender when a buyer is financing the property. And while the lender is the one requiring this information, the appraiser does not work for the lender. Your appraiser should be an objective, licensed professional who doesn’t have allegiance to the buyer, seller, or lender—no matter who is paying their fee.
The number the appraiser comes up with (the appraised value) assures the lender that the buyer is not overpaying for the property.
When figuring out this number, an appraiser will compare the property to similar homes in your neighborhood, and they’ll evaluate factors such as location, square footage, appliances, upgrades, improvements, and the interior and exterior of the home.
The assessed value of a home is determined by your local municipal property assessor. This value matters when your county calculates property taxes each year. The lower your assessed value, the less property tax you’ll pay.
To come up with this value, your assessor will evaluate what comparable homes in the neighborhood have sold for, the size of your home, age, overall condition, and any improvements or upgrades that have been made. However, most assessors don’t have full access to your home, so their information is limited.
Assessments are done annually to determine how much property tax you owe. Many districts use a multiplier (typically between 60%-80%) to calculate the final assessed value.
If your assessed value isn’t as high as you envisioned, not to worry. Many homeowners appeal their assessment in favor of a lower valuation so that they can save money on property taxes. If you’re interested in appealing your property tax assessment, let us know. We offer complimentary assistance and would be happy to help you build your case.
True market value is established by your real estate agent. It basically refers to the value that a buyer is willing to pay for the property. A good real estate agent is an expert in determining true market value because they have hands-on experience buying and selling properties. They understand the mindsets of buyers in your market and know what they’ll pay for a desirable house, townhouse, or condo.
As a seller, knowing your true market value is important because it helps you choose how much to list your property for. It can also help you decide if you want to make any improvements to your home before putting it on the market. Your agent can help you figure out which updates and upgrades will have the biggest impact on your true market value.
When figuring out your home’s value, you might be tempted to see what popular real estate sites like MLS, Redfin, and Realtor.ca have to say. When you use an online calculator to determine your home’s value on these sites, it is just an estimate. It’s not an actual appraisal or the “true market value.”
These online estimates can be a great starting point for opening up the conversation with your real estate agent about your home’s worth. I recommend that you use a real estate agent (i.e. Roger Rampuri) for coming up with the actual market value of your home.
Having an agent involved in this process is essential because they understand the market better than a computer ever could. They’re showing property in your city every single day, and they know the particular preferences of buyers and sellers in the area. Young professionals, large families, empty nesters, and other groups are all looking for different things in a home. A local agent has most likely worked with all of them, so they understand what every segment in your market is specifically looking for.
So, how does an actual real estate agent determine true market value? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:
Determining a home’s true market value is a real estate agent’s forte. If you’re a seller, your agent will help you find your home’s market value so you can list it at the right price.