How Much Is My Home Worth?
The simple answer is, whatever the buyer is willing to pay. However, the most accurate is an appraisal.
A home appraisal is an unbiased report on the valuation of a property in the fair market, performed by a trained and licensed individual. Appraisals are needed to ensure the buyer, the home seller, and the mortgage lender receive the accurate and true value of the real estate subject. The appraiser must be chosen by your lender to provide a level of independence from the buyer and seller. In order to ensure that appraisals are impartial the Appraisal Independence Requirements, (AIR) prohibits a lender's loan production staff from having direct contact with or influence upon any appraisers.
To reduce the risk of violating AIR, many lenders now hire appraisers via appraisal management companies. These companies work with many residential appraisers in order to cover a more diverse housing market and to reduce the risk of improper influence. An appraisal can range between $450-$700 depending on location, size, etc.
Although it might be tempting to look up your home value on different websites like Zillow's "Zestimate and others, these are not going to be accurate. Zillow uses a proprietary formula to determine the value of a home based off of information the website has obtained from public records and information entered by users.
The on-line site knows what the home sold for the last time it was purchased, and it knows this same information for other homes in the surrounding area. Using this and data entered in by homeowners, things like features of their particular home, Zillow comes up with a price that a home is worth.
Most home sellers will not pay for an appraisal valuation prior to putting their property up for sale, therefore they rely upon the expertise of a real estate professional to come up with the home value. Most realtors will use the Multiple Listing System (MLS) to gather "comparables." Comparables are homes of similar size, condition, age, and style that recently sold in a certain neighborhood. Comparables are examined by buyers, sellers, and real estate agents in a comparative market analysis (CMA) to establish a price range for a home based on current market activity.
An efficient CMA report, should have when possible, 3-4 recent closed sales transactions, 2-3 pending sales, 2-3 expireds or withdrawns (if available), and 3-4 active listings. The most valid of all of these measurements is "recent closed sales," not active listings! In addition, your location and condition will have an impact on the value of your home. Yes, when selling your home you want to be competitive with "active" listings. If someone has the same size, condition, and amenities as yours, but lists their home $15,000 less than yours, their property becomes more favorable to buyers.
Sometimes sellers spend tens of thousands in upgrades on a new home they purchased and expect to get the value of the home plus all upgrade improvements they paid for in the price of the property. In most cases, although this will help on the "marketing" of the home, in most cases they will not recoup this back after owning a home for a couple of years. I see this in newer communities like Esplanade in Lakewood Ranch. Buyers will put $100K + in upgrades and try to recapture this when selling two years later. You may be able to recoup this over time with appreciation.
It is always best to price your home right from the beginning. The first 30 days your home is on the market is where you get the most traction and on-line views from buyers. An "over-priced" home will stay on the market for a long time, and after several price reductions you may eventually get it sold for much less. According to the National Association of Realtors, usually 15-25% below your original established listing price.
River Strand Community- November Updates
In the month of November, 9 properties were sold in River Strand community ranging from $162,000- $515,000. Currently there are a total of 27 properties available including single family homes, coach homes, villas, and condominiums available to purchase from $189,900 to $990,000 .
If you, or you know someone who is looking to buy, sell, or invest into real estate in the near future, please contact us at Keller Williams On The Water. Michelle and I appreciate the opportunity to assist you with all your real estate needs!
Happy Holidays to you and your family!