[This article first appeared in the Chattanooga Times Free Press]
Q How can I determine what my home is worth?
A Real estate is a local phenomenon, and property values vary block by block. First, you will want to compare your property to others in your neighborhood that are similar in size, style and year built. Second, consider the size of your lot. Is your lot similar, larger, or smaller than the others in your neighborhood? Does your property have lush landscaping, a pool and/or water view? Third, you need to account for the condition of the inside of your home.
When comparing home values, you need to find homes in your neighborhood that are similar to yours. For example, if your home has not been updated, you need to find homes in your neighborhood that have not been updated to compare to. Otherwise, you will end up over valuing your home. This is why websites like Zillow that provide home values are not nearly as accurate as a property appraiser. Websites take an average of all sales in a radius and try to figure out mathematically what your home may be worth and have no idea of the condition of the property. A property appraiser will have more information available to determine an accurate value.
Also, the radius may include neighborhoods where homes are selling higher or lower than yours. This is why local property appraisers and local Realtors have a better understanding of the condition of the properties that are selling in your neighborhood. Finally, you have all the pieces and now it’s time to put them together.
You have walked your neighborhood and noted the addresses of the properties that are similar to yours inside and out. You can contact a local real estate office or county tax appraiser and they will be able to tell you what price those houses sold for and when. However, only consider those sales that have sold within the last six months. Next, compare your house to those that are currently on the market that are similar to yours both inside and out.
Homes that are on the market for more than 120 days may be overpriced for the neighborhood. Now, pick out the homes that are most similar to yours and you will have a best guess of what your home is currently worth. As you can see, home valuation is not an exact science. At the end of the day, your home is going to be worth whatever a ready and able buyer is willing to pay for it.
Get answers to questions you might have about real estate from Randy Durham, who is president of the Chattanooga Association of Realtors and a broker with Keller Williams Realty. His column appears on Sundays. Send your questions to Business Editor John Vass Jr. at firstname.lastname@example.org