Monday, January 30, 2017

Property Valuation: The DIY Route

what is the value of your property
Although some are going to be more accurate than others, any kind of valuation of a property is an estimate. Even when you get a professional appraisal, it’s going to be nothing more than an opinion, albeit an educated one. What I’m getting at here is that you shouldn’t be too intimidated by the prospect of estimating the market price of your own property. You may not have the education and experience of a home inspector, but if you know what to look for, you can still come up with a pretty close estimate of the value of your home. Here’s a guide to this DIY route.

Dig Out a Recent Property Tax Bill

Your most recent bill will list the tax-assessed value of your home. After noting this down, you should look for an assessment rate. This varies from state to state, but generally falls somewhere between 80 and 90 percent. If you weren’t aware, property taxes are a given percentage of the tax assessed value, and this value is a given percentage of the fair market value. When you work out both of these, you’ll be able to calculate the fair market value. Let’s say, for example, that your property’s tax assessed value is $160,000. If your state’s assessment rate is 80%, then your home’s fair market value will be $200,000, as $160,000 is 80% of $200,000. Of course, there are many more factors that will determine the market price when you actually come to find a home investor. However, this is one of the most fool-proof ways to get a ball-park figure.

Look at a Recent Sales in the Neighbourhood

By “recent”, I mean real estate recent. Take a note of any nearby sales that have happened in the past year, and whether these properties were similar to yours. Select a few that are the closest matches, then write down their addresses and take them to your county assesor’s office. Ask the office how much each of these homes sold for. You may feel a little out of line doing this, but this information is in the public domain, and you have every right to access it. You can always go online, but this information may not be as comprehensive, as many municipalities manage to lag behind a few months when updating their digital records. Still, the date of sale will be listed for each property, so you’ll know whether or not it’s of any value to you. After looking at a few records, you’ll be able to come up with a rough price for your home, adding or subtracting value depending on any renovations or difference in size.

Use an Online Calculator

There are now countless real estate websites out there which contain a free assessor tool. While there’s a fair amount of scatter between the prices they’ll come up with, once you use enough of them it will be fairly easy to find a rough median. These online calculators will draw on information from a wide range of sources, including public databases and the company’s own private records. With these, you’ll have to answer quite a few questions about your home, so it may be worth taking some notes beforehand. Things like the home’s square footage, the number of bedrooms and bathrooms, and the date of construction will typically come into play. After entering information in all its fields, the calculator will come back with an estimated fair market value. Some of these programs will also list similar properties in your area, along with their current or most recent asking price. Be aware that they operate on the assumption that all those other properties have already calculated their own fair market value using the same tool in order to set their asking prices.

Location, Location, Location!

If you’ve been pulling up blogs on real estate for a while, you’re probably sick to death of reading this old saying. Still, there’s a reason why it keeps coming up; it’s true! The location of any given property is going to have a massive impact on the fair value of your home, and it’s important to consider when you’re adjusting the estimates you get. If your home is in a quiet, residential area, it’s always going to score more points with buyers than one in a high-traffic commercial street. There are a range of things that go into this old adage of “location, location, location”, but there are only two main ones you need to concern yourself with. First of all, how close is the property to public transport links? People who have to commute regularly will go much higher for a property that’s close to their train line, and therefore more convenient for their commute, than a buyer who rarely uses public transport. The next big thing to think about is the concentration of schools in the area. Education is a major concern for any parent, and if the place is big enough for a family, the selection of local schools is going to be a big selling point.

Finally, Consider Going to an Agent

If you’re certain you want to sell your home, but you’re not prepared to fork out for a professional property appraiser, then you may just want to cut to the chase and ask a real estate agent for their input. Estate agents will have access to all kinds of private industry data that can be used for honing in on a more accurate estimate for your home. Just make sure you do your research, and find an agent that’s got a good, long-running reputation. These people get paid on commission, and some more inexperienced ones may go over a reasonable mark, meaning that your sale will be dragged out. Furthermore, only approach an agent if you’re dead set on selling. Again, because they get paid by commission, it’s highly unethical to ask for this kind of information if they don’t have some view to a paycheque!

If you were curious about the market value of your home, I hope this guide has been a big help!

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