What's your home really worth?

What's your home really worth?One of the first things you do when you are thinking about selling your home is to determine the value of your home.  

The “true” value is determined by what a ready, willing and able buyer will pay for your home. 

But, we want to know the value before we put it on the market.   

Since every home and lot is different, this task is more art than science.  

So, let’s look at the typical ways people attempt to determine value and see downside of each approach.

One of the first places people look is the appraised value computed for property taxes.  This is typically the least accurate of all the approaches.  These values are usually based on property data and rarely on a personal visit to the neighborhood, let alone the inside of your home.  It has nothing to do with the value of your home and everything to do with the taxes you will pay.

Picture someone in a cubicle throwing darts at numbers on the wall.  This is a tax appraisal.

The second common approach is a tool like the Zestimate from Zillow.  The industry name for this type of estimate is an Automated Valuation Model or AVM.  

The AVM is a step above the tax appraisal and still not perfect.  The use a set of data similar to the tax appraisal and they apply mathematic modeling to calculate the value at a certain point in time.  

This is a better approach, however, it still does not factor in the individuality of your home.  The model does not see that you upgraded the kitchen and master bath last year.   This type of evaluation is more accurate for cookie cutter homes in large neighborhoods and less accurate for everyone else.  

Appraisers and experience real estate agents offer the best opportunity to get an accurate number.  However, in determining value they are always looking backwards.  They look for current listings and recent sales in your area.  If your market is rapidly appreciating (like Nashville) the value six months ago could be significantly less than the value today.

Since these professionals will likely be coming inside your home, also make sure they are aware of everything that you have done to improve the home.  Don’t be afraid to show lists of improvements, invoices, before/after photos and anything else you can do to document the work completed.  

Be sure to ask how they are make adjustments for time and improvements, and check their work afterwards. 

Who wants to leave money on the table?

If you are thinking about selling your home and want to know the value, then hit reply and I'd be glad to talk to you about it.

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