March 13, 2020
4 MINUTE READ
If you’re considering selling your home, one of the first questions you’re likely to ask is: “What is my house worth?” The value of your home will have a slightly different meaning depending on who you ask. A home’s value can vary from a homeowner to an appraiser, and to a tax assessor. However, your house value simply means the amount for which your home would likely sell for. This is also known as the current market value.
Typically, all of the parties involved in a real estate transaction — mortgage lenders, home buyers, and home sellers — will rely on a licensed, professional real estate appraiser to calculate the current market value of your home. However, there are things you can do to help determine your property value estimate.
With all of the technology we have at our fingertips, it’s no surprise that today’s sellers have more valuation tools than ever at their disposal. But with these tools comes increased confusion. Keep in mind that while automated valuation models are often used to get an idea of your house value, only an experienced real estate appraiser can build a compelling case to support the right asking price that will be accepted by your buyer’s lender.
These automated valuation models are essentially algorithms designed to estimate your property value based on multiple pieces of data. AVMs provide different results based on the design of the algorithm — and this is where things can get tricky.
Keep in mind that the estimates you see are not necessarily the same version that is being used by your lender to make a decision on your property value. Consumer-facing algorithms, or AVMs, are designed for consumer marketing purposes and take all area comparables into account. On the other hand, more accurate estimating models, such as the ones used by lenders, do not include outliers, or exceptional properties that sold for either especially high or low prices, and would, therefore, skew the average of comparables that you’re looking at.
Algorithms used by lenders often include a “confidence score” that can help give a clearer picture of how exact or firm the estimate is. More often than not, this type of qualification is not included with typical consumer models.
From supply and demand in the local market to the location of the home, there are a number of factors that influence and impact your property value, including:
Forbes also revealed several other surprising factors that can affect the value of your home, including the name of your street, your house number, and if there has even been a death on the property.
Of course, the best way to get an idea of your property value is to enlist the services of a real estate agent who can give you a professional valuation. Experienced real estate agents have the expert knowledge and skills necessary to determine property values for your area and can give you a much clearer picture of your property value.
At Reali, we offer honest and transparent real estate service, with experienced local agents, big savings, and zero pressure.