The Internet is swimming in offers for free, instant home price valuations. They’re all over Google search results, Facebook, Craigslist, and just about every Realtor web site. You can look up a home’s value on Zillow, eppraisal.com, and thousands of other sites which promise instant, online and accurate real estate valuations. But the truth is, there’s much more to know about your home’s value than you can get in any home price valuation, or even a formal, written appraisal. I’m here to tell you the dirty truth about home price valuations.
I have performed literally thousands of home price valuations (aka CMA, or Comparative Market Analysis) over the years I’ve been a real estate broker. I’ve done them for all kind of properties, and in all kinds of markets. I’ve done exterior-only, full interior valuations, value estimates for mobile homes, commercial property and raw land valuations – the works! I feel very comfortable valuing property, and I think I do a pretty good job of it.
But here’s the dirty truth about home price valuations: your home is not worth any one particular price. Rather, it is worth something within a range of prices, and could sell anywhere within that range. If anyone could reliably and consistently tell you exactly how much any particular property would sell for at a particular point in time, that person would be fabulously wealthy. It’s tantamount to having a crystal ball and being able to accurately prophecy the future.
You see, a home price valuation is based on a whole series of assumptions about the state of a number of different variables. Those variables can change from day to day. Some of those variables can be modified by the home owner, and some of them cannot.
For example, let’s look at the purpose of the valuation itself as one variable. Are you looking to get a valuation for your home at fair market value? Or are you looking to get a valuation for a quick and dirty sale? Are you wondering what a fair price would be to sell the home to your brother, or to know what is the absolute most you could get for the property on the open market, after having been carefully prepared for sale?
It could be you are thinking about putting your home on the market in the spring – say, six months from now, and you’re trying to figure out what it’s worth. The value you’d get would be today’s value, but the market of six months in the future could bear very little resemblance to today’s market. You could speculate about the amount of appreciation or depreciation you’d see in the next six months but whatever value you arrive at would amount to at best an educated guess.
For the sake of argument though, let’s say you’re looking to know how much you could expect to sell your home for if you put it on the market tomorrow, without touching it, for a strictly as-is sale. Let’s also assume that you are going to market the home on the MLS, and that you’d like the sale to be closed within 60 days. Knowing this, we have tightened up the range of values within which the home will sell, but there are many more factors that will have a bearing on the sale price.
For example: will the home be vacant, staged, and easy to show any time, or will buyers need to make an appointment to see it? Will there be open houses, will the home be on the broker’s open tour? Is the property going to be professionally photographed, and will a virtual or video tour be created? Will the home be a featured property on the top real estate portals? Are there repair issues which have not yet been identified that will result in a lower sale price, or concessions made to the buyer?
All of these are variables which can be known or controlled, and that will enable the range to be tightened further. There are, of course, many variables which cannot be known or controlled, such as weather, interest rates, natural disasters, employment, buyer demand, and of course, competition from other sellers.
So it is hopeless? Is there no way to know with any certainty just how much your home is going to sell for? The truth is: no, there’s no way to know with 100% certainty and exactitude how much your home is worth. However, once you have eliminated or set those variables which can be controlled, it is possible to determine within a narrow range of values what a given home is worth.
When I do home price valuations for a client, I make an assumption that the client will be using my system, to get the very highest net possible when selling their home, in the least amount of time, while reducing hassle, uncertainty, and risk. If you are interested in knowing how much your home could be worth with the best professional services available, please request a home value analysis from me today.