What Is A Home Market Evaluation?
If you’ve been considering the idea of listing your home for sale recently, chances are you’ve got a certain price in mind that you want to receive for it — even if it’s only within a ballpark range.
You might be taking into account things like the age and size of your home, how much you paid for it initially, how much money you’ve invested into it in the way of renovations and repairs, and even what your neighbors' homes have sold for recently too.
However, there are many other factors that go into determining a home’s current market value — especially when you consider they rely on external factors that can change day-by-day. That’s why when it comes time to sell your home, it’s important to gauge your initial expectations and wait to receive a professional home evaluation before fantasizing about your potential profit.
To learn more about home market evaluations and what goes into determining the current value of your home, let the following comprehensive guide below walk you through everything you need to know....If you have any questions feel free to reach out.
The Importance Of A Home Market Evaluation
No matter which side of a real estate transaction you might be on — whether as a buyer or a seller — a professional home market evaluation can prove to be extremely useful to you over the course of your transaction.
For sellers, a home market evaluation can be used to help you accurately develop your pricing strategy. By entering the market with an attractive and competitive list price for your home, you can generate immediate interest in your listing among buyers, which in turn, will hopefully help to generate a bidding war between those most motivated to purchase your home.
From a buyer’s standpoint, receiving a professional home evaluation of a property you’re interested in purchasing can help you determine whether or not the listing is priced fairly and if you’re being deceived into paying more for it than it should currently be worth.
Either way, an accurate home market evaluation from a reputable, impartial professional will eliminate any obscurities or inaccuracies when it comes to a home’s current market value. Whether that means the seller’s initial estimate of their home’s value was an underestimation or an overestimation, a home market evaluation takes the guesswork out of the equation.
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The Use Of Market Data For Home Evaluations
Home worth evaluations also lean heavily on the use of up-to-date market data and statistics to help inform their estimate of a property’s current value.
As Realtors® have insider access to the most recent housing statistics and market data for specific geographical areas, they can cross-reference these findings to strengthen their accurate estimates of what a new listing’s market value should be.
In order to do so, a thorough database search of all homes listed or sold near the property is conducted to include the following data:
- Active Listings: Because sellers can ask for whatever dollar amount they want, homes currently for sale do not reflect market value until they sell. Active listings are useful if they are direct competition with your home.
- Pending Listings: Since pending listings have not yet closed, the actual sold price is still not available. Pending sales cannot be used as a comparable sale, but can be used to indicate the direction of the market.
- Sold Listings: Sold listings provide the hard data for comparable sales, which can be leveraged to determine the market value of other homes including yours.
- Cancelled Listings: Although there are many reasons why a home may have been taken off the market, one of the most common reasons is because the asking price was too high. These are good warning signs for overambitious sellers.
- Expired Listings: These listings reflect homes that did not sell, which could be the case if the home was overpriced. Generally speaking, the longer a home sits on the market, the better an indication it is that the price doesn’t reflect fair value for the property.
Interested in seeing what the current listings in your local area are priced at? Find out by visiting Our Listings page here.
Examining Comparable Sales
Using the listings of comparable sales, homes are narrowed down to those that most closely resemble the home you’re trying to purchase or sell. Factors such as location, square footage, age of construction, proximity to local amenities, upgrades, and the overall condition of your home are taken into consideration when comparing it to similar properties.
If multiple homes in your neighborhood comparable to yours have recently sold around the $1 Million range, for example, that might mean you could expect to receive a similar amount for yours. If you’ve got a much more impressive and updated home in comparison to those, that means you could expect to receive more than the average $1 Million price range — and vice versa if your home is in a comparably worse condition.
This is why in the world of real estate, location is among the most important factors when determining whether or not to make an investment in a property. Just because one home might currently be in better condition than another, if the less desirable home is in a better neighborhood, it could pay higher dividends when you eventually choose to sell.
Interested in learning about the current value of your home is in today’s market? And at no cost and with no obligation? Sign up for a Free Home Evaluation here to get started.
