What's My House Worth?
What’s my house worth is the ultimate question.
Before I explain how the value of your home is determined for the purpose of marketing, let’s first get the definition of three terms of which you may be familiar out of the way. These definitions are my words, and should you conduct a search, you will find pages written for each. I am keeping the meanings short and sweet for reason of simplicity and understanding.
Assessed Value: aka “property valuation” is a formula applied by the local taxing authority according to property description for the purpose of real estate taxation. This is your property tax bill.
Appraised value: an objective opinion of property value determined by a qualified professional heavily weighted by historical data in the comparison of like-kind property, to provide “point in time” value, most often required by financial institutions to establish risk factors before loaning money.
Market value: consumer driven, the highest price a well informed buyer who is neither under duress nor compelled to buy will pay, and the Seller who is under the same circumstances of sale will accept.
For the purpose of determining a price or price range of your home for sale, agents do not use Assessed Value which is the measurement for taxation. We do not provide Appraised Value as most are not licensed in that capacity, though if you already have an appraisal, the data will be considered. What we are trying to get to, is a projection of market value, an "asking price," and for that purpose use a Comparable Market Analysis or CMA.
What a CMA contains of is all the data relative to your home in terms of location, size, structural components, features, condition, community amenities, and age. Similar to an appraisal, we are looking for and making like-kind comparisons. Different from an appraisal, all “statuses” of sale available through Multiple Listing Service (MLS) are considered. They are:
Active – currently on the market for sale
Under Contract Backups – the Seller has accepted an offer but will accept back-up offers
Pending – accepted offer no back ups
Sold – sale has closed and deed conveying title is recorded
Temporarily Off Market – just as it reads, but reason off market is important
Expired – listing has failed to sell, what reason
Cancelled – Seller has decided not to sell
Although MLS data provides a wealth of information, no CMA can be complete without consideration of tax records which contains both MLS and Non-MLS sales data. All must be considered to answer the "What's my house worth" question.
Tax records are an invaluable tool for gleaning additional information and cross-checking that provided in MLS. In cases of much loved neighborhoods where there is no recent information, a wide net must be cast to find “any” data that can be linked back to your home. In cases where tax and additional public records are the only means of discovery, it can require days of reading and numerous phone calls to acquire answers before applying the “if - then” premise of deductive reasoning to pinpoint approximate value.
Once compiled, all data is reduced to writing as a report. Since the data source will dictate the formatting of information, the content is best explained face to face while you take notes. It simply won’t make sense otherwise, and even after our meeting, you will likely call or email with questions.
What’s my house worth? Only research and data can provide the answer.
Contact us to ask any questions you may have.