What is the value of my home?
When you are buying a home, you need to know how you can accurately estimate the value of the homes that interest you. It can be hard, however, to find advice that is accurate when there is so much conflicting information from real estate agents and the media.
Here are a few tips that can help you to understand how you can value a residential property:
What is the market value?
Market value is the price that can get negotiated between a seller and a willing buyer. The cost is not what the current listing price is nor the amount that had previously been offered on the property.
The recommendation from valuers is, if you are not familiar with the market, then you should hire the services of a professional valuer.
Finding local sales
A standard method used to value a new property is comparing it to the properties that have sold within the area. You should only be comparing sale deals with the following attributes
- Sold within the last six months
- Within 1km of the property that you are buying or selling
- Similar features to the property you want to be valued
Now figure out whether they are comparable
The properties that have sold recently will need to get eliminated from those that are not similar to your property.
Apply the following attributes
- Rooms: Look for the same number of bedrooms and bathrooms
- Quality: Are both properties of the same quality and standard?
- Location: Is there the same distance to amenities? Access to public transport and are the streets similar in appearance?
- Size: Is the land size similar and all living areas comparable
Your final figure will be inaccurate if you are not comparing it with those related to your home or anything related in the housing industry.
If you haven’t looked inside the home, you can search for the property which will often bring up old property listings of that home.
Inferior or superior
Once you have listed a few properties that are similar to the one you are looking at or selling, then decide which ones are inferior or superior to yours. If you find this too difficult you can ask a family or friend to decide which ones, they think are better.
Adjust for the market movements
Quite often, comparable sales that are over three months old don’t work as an indication of the new market conditions. Ensure that you make the adjustments needed to take this into account. If you are visiting open homes and auctions, then you should be starting to get a feel for what the market is like in that particular area. Research the web and see how hot the market is, in your local area. Always try to find if the current economic situation favours a buyer’s or a seller’s market. Accordingly, the prices may vary and act to your advantage. If prior research is not done, you can easily be taken for granted and end up with a property or a house you could have originally gotten for half the price.
Common mistakes that people make
If you do your research correctly, and you are careful, then you can accurately value your property using the methods above. People do make mistakes that end up in being offered too little, overpaying or missing out on a property.
If you cannot get a proper value or worried you are undervaluing your home, you can take up the services of a professional valuer. A valuer will help you come up with the best value for the home.