How To Learn About
Real Estate Value

At some point in time, a homeowner is going to be curious about real estate value in their neighbourhood. They may have a glimmer of an idea of their house value simply by chatting over the fence with a neighbour. Or they may keep tabs on local asking prices by occasionally perusing the real estate section of the local newspaper.

A home owner may wonder, 'what is my house worth?, just because they'd like to have an idea of their net worth. Or they may be considering moving up, out, in, down or over, and want to know if it's financially feasible for them. They're reluctant to seek the assistance of a REALTOR® because they don't yet want to make any commitment. They just want to have an idea of home market values on their street.

Whatever the reason, there are a few ways a home owner can obtain a real estate value estimate.

Home Appraisal

You could hire a company who specializes in home appraisal. An accredited appraiser will visit your home, maybe take some measurements and a few photographs, and possibly inquire as to the purpose of the appraisal.

Typically, they'll use a method of evaluation called a Comparative Market Analysis (CMA), which is the same method employed by REALTORS®. In exchange for a flat fee of a few hundred dollars, or more, depending on the size or complexity of the property, the appraiser will provide a written report containing the technical details of your property, maybe with photographs, as well as its limitations. They'll include copies of comparable listings of homes similar to yours, with adjustments made to the sale prices for time, size, features, improvements and location.

But you must keep in mind that it's an appraised value, which isn't necessarily market value. The estimate is based upon historical data. Market value, on the other hand, is subject to current supply and demand - in other words, the whim of the market and local economy.

Market value is basically defined as the price a willing buyer will pay to a willing seller, with full knowledge as to the purposes for the which the property may be used. If either party is under duress, the ultimate sale price could vary considerably.

If you'd like to go it alone, a home owner could learn about real estate value by making a trip to the local ...

Land Titles or Registry Office

There, you could explore the records for details of homes recently sold in your neighbourhood. Obviously, property values will vary a lot, depending upon how comparable they are to yours. This method will be somewhat helpful if you have a specific property that is similar to yours, and you're familiar with its features. This government office will not, however, give you details about the homes.

Evaluating a property is ...

Not an Exact Science

And it's not simply a matter of comparing your home to others.

When it comes to correctly determining real estate value, knowledge of the local market conditions is imperative. And objectivity is right up there too in importance. It's a common error made by homeowners to over-estimate the house value of their property because it's their home. It's almost impossible to avoid subjectivity about its advantages and deficiencies.

Another way to get an idea of property values is to seek ...

Professional Guidance of a REALTOR®

A professional real estate sales person has complete access to all data for sales and current listings, so can prepare a detailed CMA based on home market values in your neighbourhood. If they're experienced, they also have good instincts. If they're reasonably successful, they'll not fear being completely candid with you when it comes to advising you objectively about your home and its marketability. Be careful here - if an agent is desperate, and really needs the business, they may be inclined to tell you what they feel you want to hear, which isn't necessarily what you need to know.

If you're planning to list your home for sale with a real estate brokerage, and you've not been referred to any particular REALTOR®, you might consider interviewing more than one agent. Compare the services each has to offer, and their opinions about the real estate value of your home. But more importantly, determine how you feel about each of them.

Who Do You Trust

... to perform efficiently - and take care of your interests?

Don't automatically list with the highest bidder. They may have opined high just to get your signature on the listing contract.

If you want to try a private sale for a while, you could offer to pay a REALTOR® for their opinion. To be fair, I suggest you not take advantage of a REALTOR® by seeking their opinion, asking them to work on your behalf, and then not pay them for their time and effort. They must eat and pay the rent too.

When asked for my considered opinion, and there's not going to be an immediate listing, I charge a nominal fee. But I agree to deduct this fee from any future commission earned from the sale of their listing if the home owner lists their home with me within a certain time period.

Determining real estate value is not an easy task if you're going it alone. But considering how much money is at stake, do you really feel it wise to follow this route? I don't think so.

Seek Professional Help

If you're in my market area, I may be able to assist you personally. Or if you're somewhere else in the world, I may recommend a local REALTOR® for you. In either case, determining real estate value is too important to leave to an amateur - you.

To learn more about selling a home and real estate value, click here.

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