Nov 23, 2021
The common concern of real estate property owners has always been how much value to put into their property, especially if they’re planning to sell it. It’s the market that’s supposed to say how much a property is at any given moment. But this isn’t that easy to figure out for real estate properties because no one tells sellers how much they can sell their properties. Public listings can sometimes be misleading because of overpriced or underpriced listings.
There are various ways to come up with a reasonable estimate of a property’s value. You can do some of them on your own, or you try a Local Agent Finder explanation to look for and ask for help from the experts. Here are a few suggestions on how to get the best estimate for your property.
- Use Quick Calculators For Your Basic Reference
One of the easiest and most convenient ways of getting an estimate of your property’s value is by consulting numerous online tools that offer a quick calculation. These online tools are called automated valuation models (AVMs). Their calculations are based on the use of publicly available data. Some of the data they use are recent sales in your area, tax payments, tax assessments, loans and mortgages, listings, deeds and transfers, and other public records to come up with an estimate generated by mathematical models.
There are many online estimators and they have varying methodologies, so the estimate you get from one may be significantly higher or lower than those you get from other estimators. Online estimators are a good starting point sincethey can give you a quick and free calculation of your property’s value. You should treat their estimates as a basic reference. Their algorithms are usually based on basic features such as the number of bedrooms, square footage, location, and market activity. They don’t include condition, upgrades, façade, etc.
- Check Out MLS Listings Of Comparable Properties
Another source of estimates for your property is MLS listings of comparable properties in your area. You can get an estimate of how much your property is valued as of date by looking at public listings which feature MLS listings. These are listings that are used by licensed real estate brokers and agents.Their listing prices are based on actual purchase values or transaction values based on deeds and transfers. Price is one of the things that buyers consider when they’re planning to buy property.
You should look for MLS listings of properties in your area which have similar or comparable features as your property. For instance, you can start with properties near or adjacent to your property’s neighborhood that have the same number of bedrooms, the same square footage,and the same finishes and fixtures. The prices of these ‘comparables or comps’ are an acceptable reference for the pricing or valuation of your property.
- Ask A Local Real Estate Agent For CMA
If you’re still not quite satisfied with the estimates you got from online estimators and MLS listings, you can ask a local real estate agent to give you what’s called a Comparative Market Analysis (CMA). Agents come up with the CMA by pulling the most recent data on comparable properties in your area which were sold recently.
The advantage of a CMA over online estimators and listings is that the agent puts in their value-added estimate. Aside from the data they pull up, agents use their knowledge of your neighborhood as well as any special features or upgrades of your property to arrive at its latest value. Online estimators can only come up with valuations based on general data processed by their algorithms. By contrast, an agent can draw on their expertise and knowledge about your neighborhood. They can drill down to your street or village to come up with an accurate price.
The disadvantage of a CMA is that while most agents would offer to do them for free, they’d be doing so with the hope that you would sell your property through them, so the price might be a bit pumped up to give a good impression.
- Hire Appraisal Services
Finally, if you’re serious about planning to list and sell your property, you should consider hiring professional appraisal services. The estimates that property appraisal firms come up with tend to be the best and most accurate figures because of the methods that they use. Here are some of the appraisal methods used for real estate valuation:
- Sales Comparison Approach – This approach uses the prices of the most recent sales of comparable properties in your area.
- Cost Approach – This approach is used in the sale of properties that don’t regularly yield income such as school buildings, churches, etc. If the buyer is going to demolish the existing structure on the land, the depreciated value of the existing structure will be deducted from the estimated cost of building a new structure
- Income Capitalization Approach – This approach is used for residential properties which yield rental incomes or for office and commercial buildings that yield regular incomes.
Estimate Using All The Known Methods
To come up with the best or most accurate estimate for your property, you should gather all the estimates, valuations, and appraisals that you can get from all possible sources. This would give you a better picture of how much your property is worth. To get the best estimate, you should consider all these valuations and come up with a weighted average. But if you can afford to hire professional appraisal services, their estimates are the likely basis of any near future sale.