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How To Really Determine Your Property’s Market Value?

When you are living in a rented home, you don’t appreciate the importance of a good valuation of the property. All you need to do is pay the required rent and pay your bills. However, for the landlord, the value of the land and building in real terms has a far-reaching impact. The most prominent is that the rental value is determined, to a large extent, by the value of the home.

However, the value of the house also plays a big role in the insurance cost, tax cost, selling price, and even the maintenance cost of the structure. Moreover, the value of the home plays a huge role in how easy or how difficult it is to get financing for that property. If you are in the market for a new home, or you are an existing homeowner, you need to know exactly how you can get the most bias-free valuation for your property. Here are some of the best techniques to help you do that.

Online Tools

The easiest and quickest way to evaluate a home is to use freely available online tools. Most homeowners want a quick and cost-effective solution and for this, they will use a free tool. You can simply search for an ‘automated valuation model’ and you will come across a number of tools listed across dozens of sites. In most cases, you won’t even have to sign up to get a quote. Real estate agents usually use a slightly better version of these tools, which are often on a subscription basis.

These paid versions are slightly better because they base their findings on real-world information. Free versions will provide estimates even in situations where the database doesn’t have enough information. The best quality tools in this regard can be quite expensive to use and are often employed by real estate companies and insurance companies. These tools also have a ‘confidence score’ which shows how confident the tool’s vendor is in the results that the tool is showing. Naturally, these tools are much more accurate and closer to the real market evaluation.

Professional Appraisal

If you’ve ever had to apply for a mortgage, then you will most likely have interacted with a professional appraiser. Since a lot of the expenses associated with a house are based on the value of the home, homeowners often have to interact with appraisers. These are usually people with a lot of experience in the real estate market who understand what really makes a difference to the price of the home. You can get a property insurance appraiser to evaluate your home at any time, and as many times as you want. They usually have a small fee, and they can provide you with an estimate in a day or two. 

The important thing is that if the appraiser is coming from an insurance company or a real estate agent that you want to sell your house through, they could have a bias. This is why it helps to get a third-party appraisal as well.

Comparative Analysis

A comparative market analysis is most commonly used by homeowners when they want to list their house for sale. A CMA is usually conducted by a real estate agent. It is similar to an appraisal, but it is less detailed and the focus is on pricing the home to sell it. This is one of the most common ways for homeowners to evaluate their houses.

The problem here is the bias involved. The appraiser, who is usually a realtor, is more likely to give you a slightly higher value because they wish to benefit from the deal as well. If you are going for a CMA, consult with a few different realtors. They will often provide this service free of cost.

Similar Properties

Something you can do on your own is to look at the price of similar properties in your area. You can visit any real estate website that has access to a free MLS and have a look at what other properties are listed for. This will give you a ballpark figure of what your home is worth. However, keep in mind that most properties don’t sell for the listed price. They are usually listed a little bit higher and lowered throughout negotiations when a buyer is really interested. This is not a bad approach if you just want a rough idea.

One of the main things that homeowners don’t understand when evaluating their property is that the condition of the home plays a huge role in the price. Especially if you are looking for an appraisal to put the property on the market, your asset could be worth significantly more, or less, depending on the condition it is in. This is why the best way to get an accurate reading is to get a professional appraiser to actually inspect your property and give you a detailed report based on their findings.

 

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