Home values! Lots of opinions on this subject. Homeowners that keep a close eye on their neighborhood have an opinion, the tax assessor has an opinion, Zillow has an opinion, talk to 3 different Real Estate professionals and I’ll bet you will get 3 more opinions! In all this confusion of opinions, the question comes up “who sets the values of real estate”? The short answer is BUYERS! Buyers set real estate values. Buyers are the folks that are doing the most direct comparisons of homes as they go from available home to available home and they make the decision of what home is the best value. Each time a buyer walk into a home for sale, they ask themselves this question: “for the price, which home meets our needs the most, and which home gives us the most bang for our buck”.
Then there are the “market forces” that must be taken into account, that “we” (consumers and real estate professionals) have no control over and a good home value report or CMA (comparative market analysis) will take into account for when putting a value on your home. In a “sellers’ market” there are typically more than one buyer for a particular home. This will drive the “home value” up and shorten the average days on market (DOM). The opposite is true in a “buyer’s market”. In a “buyers’ market”, the marketing time is extended and the days it takes to find a qualified buyer to come forward and make an offer to purchase will be extended.
Condition and location also need to be taken into account when setting a value, this is where an experienced real estate professional can make all the difference in the world when putting a value on your home. This is where Zillow values fall flat. Zillow is a number cruncher, and takes raw data, square footage, age, and “sold” homes into account, but Zillow does not have the human touch to quantify condition and location.
When looking for an Agent to represent you on the sale of your home, don’t always hire the Agent that gives you the highest opinion of value. Look for the agent that takes into account all the market factors including average days on market for similar homes within a close proximity, an honest assessment of condition to include curb appeal, and location, (corner lot, cul-de-sac, on a busy street etc.). When all these factors are taken into account a good agent will give you an accurate opinion of value and a reasonable expectation on how long it will take to sell your home.
What is My Home Worth? By, Dan Hunt
