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How to Determine Your Home Value
Dated: May 6 2023
How to Determine Your Home Value
Useing online tools to determine your home’s Value is
to calculate an estimated value of the property. They’re a simple and convenient way to get a ballpark idea of what your home might be worth.
Online tools are not as detailed as a professional appraisal, or a CMA provides an agent’s evaluation of the home and market to provide an estimate of value, typically for listing purposes.
Knowing your home’s value allows you to evaluate what you can afford, determine whether a listing is priced appropriately and decide how to price your own home,
Pros of online valuation tools:
- Most are free and easy to use.
- They can quickly give you an estimate of your home’s value, often without having to provide a lot of info about your home.
Cons of online valuation tools:
- These tools are designed to provide an estimate and may not take into account unique aspects of your home that appeal or don’t appeal to buyers.
- Valuations can vary from one tool to the next, depending on which factors the tool uses to determine value.
- These tools generally don’t take into account things like renovations or repairs, which can significantly influence your home’s value.
Working with a Realtor, The process many realtors use to estimate a home’s value is called a Comparative Market Analysis (CMA).
A CMA includes information about comparable homes (also known as “comps”) in your area. A good CMA can tell you what homes similar to yours are selling for, how long it’s taking them to sell, and what homes sold for compared to their original list price.
When working up a CMA, realtors typically look for recently sold homes that are similar in:
- Location and Neighbourhood
- Number of bedrooms/bathrooms
- Style and view
- Property Condition
- Home type (e.g. single-family home, condo, townhome, etc.)
- Active Listings
- Recent sold price
- Days on the market
- Expired listings
Understanding home value
There are three types of home value you need to be familiar with as a seller:
- Appraised value: According to Investopedia, appraised value is a home’s value as determined by a professional appraiser at a given point in time. Appraised value is used by mortgage lenders during the underwriting process to determine how much a buyer can borrow.
- Assessed value: Assessed values are used to determine how much property tax is owed on a home. Assessed value is set by a municipal or county tax assessor, who evaluates the home’s features and those of comparable properties to arrive at a valuation. It’s usually a lower number than fair market value.
- Fair market value: Fair market value refers to how a home is valued when both the buyer and seller are reasonably knowledgeable about the property and neither is under any pressure to buy or sell. According to realtor.ca, fair market value tends to be the truest measure of a home’s value overall, since it’s based primarily on supply and demand.
The prospect of selling your home on a sale becomes much less intimidating when you’re heading to market with a carefully researched valuation in your back pocket.
Remember, the goal is to sell your home at the right time and the right price according to your needs.
By: Fiore Malatesta
About Passionate Realtor, Avid Investor, Loving Husband, and Father of 2 Beautiful Boys. In today's market you need a passionate, Vaughan local advisor that can help you navigate the home buying and....