How to Determine the Market Value of a Home
Between stable home prices and low mortgage rates, it might be the right time to sell and purchase a new property. But buying a new home is often contingent on whether you can sell your home for a specific price. Many homebuyers use proceeds from a home sale as down payment on a future property. The more profit you receive from a sale, the easier it'll be to secure a loan for your next property.
Market value of a home can fluctuate from year-to-year, depending on whether it’s a buyer’s or a seller’s market. In a buyer’s market, supply exceeds demand which results in lower home prices. A seller’s market, however, is characterized by high demand and less supply, resulting in higher home prices.
Regardless of when you decide to sell a property, you need a clear idea of the market value of your home. Here are two ways to determine a fair price for the property.
1. Comparative Analysis
A comparative analysis can help determine the most appropriate sale price for your property. You can locate comparative information on real estate websites such as Zillow, or ask your real estate agent for information on comparable sales.
This analysis provides sales information for properties in your neighborhood. This includes sale prices of similar recently sold homes and the sale prices of similar homes on the market. This helps assess the best price for your property.
2. Certified Appraiser
Understand, however, a comparative analysis doesn't tell the whole story about your property. It is important to base your sale price on comparative sales, but you shouldn’t underprice your home.
A certified appraiser has the experience and know-how to assess the true market value of your property. Appraisers also use a comparative analysis when creating their reports, but they also take into consider the condition of your property. The appraiser completes a thorough walk through of your home, making note of any improvements or upgrades.
If your home has undergone extensive renovations with high-end upgrades, it may appraise higher than similar properties in the neighborhood, which allows you to sell at a higher price.
Knowing your home’s worth is crucial to determining the right sale price. You don't want to overprice your property, nor do you want to underpriced the home. Speak with a real estate agent to get a comparative analysis, and then give us a call to discuss your lending options.