The best method to determine the current market value of a home
Knowing the current market price of a home is important if you want to buy or sell one. The key word here is ‘current’, meaning it is of the utmost importance to know whether the valuation you get is the current valuation or not, because real estate prices are known to change over time. It also changes with location, meaning the value of a property in California certainly differs from the value of a property in Washington. Your property valuation is also subject to change depending on whether you live in a metropolis or suburb.
An example
Each property is different. Let’s say you have a house that has two bedrooms, a bathroom and a living room. You decide to sell your house. You start looking at the price and find out about a two-bedroom, one-bathroom apartment, but no family room. Instead it has a formal dining room the same size as the family room in your house. Do you think the prices will be safe? Probably not. The exact market value of your property cannot be said or estimated. But you can get an approximation.
Comparative market analysis
It is one of the best ways to estimate the current real estate market value of a home. In truth, this is the only method of determining market value, because all other methods are just variations on it. The simplest process is to gain knowledge about any property that has recently sold in your neighborhood.
As mentioned above, it is almost impossible to find a property exactly similar to yours, but it is easily possible to find one that is almost similar. The homes used to compare valuations are called comparables or comps (used by real estate agents and mortgage lenders). Acquire data from as many comps as possible because the higher the number of comps, the closer you will be to an exact approximation.
some tools
One method for this is the Multiple Listing Service or MLS, which is the database of all properties currently on the market. There are many websites that offer MLS service through their web pages. Google your query, find such a website, and search for houses neighboring yours. Another popular, but expensive, method would be to hire an appraiser who is experienced and professional and is willing to do an inspection of your home themselves. Finally, there is zillow.com, which is an online real estate database that uses an algorithm called ‘zestimate’ to appraise property values. Although no one knows what the calculation is based on, it is known to be a pretty good approximation for this purpose.
Knowing the current market value of your home is important as it can save you a lot of money by providing you with an estimate of the value of the property in question.