For those considering selling their home one of the first questions is How Do I Determine the Value of My Home / What’s My Home Worth? Today there are literally dozens of Internet sites out there offering to assist you in determining your home’s value, and probably the most well known among these is Zillow and it’s Zestimate. They are called “automated valuation model” (AVM) sites, and they use statistical modeling techniques that calculate the property value by comparing it with nearby similar-sized homes that have recently sold in your area. These tools crunch their data with publicly available numbers from several listing services and combine them with regional trends to calculate a probable sale price for your property.
This begs the question… Do I still need a real estate agent to help me through this “assessment” process?
Indeed you do and in fact there are several reasons why real estate professionals are critically important in this initial step of selling a home.
1. These automated valuation tools are not accurate
In fact most AVMs include disclaimers and confirm their evaluations may be off by around 5 percent. The truth of the matter is they can be inaccurate by as much as 20 percent, according to a study by Standard & Poor’s. This means that anyone strictly guided by these calculations could potentially over or under price their home and consequently be losing both money and potential buyers.
2. There are several factors that contribute towards the value of a home that the tools ignore
Several pieces of information compose the valuation range of a property. Market data is just one of them and even here these valuations fail to consider such factors as current buyer trends (these vary in time across the various price points and include factors such as style of floor plan, to amenities such as home theater rooms and outdoor kitchens in luxury homes, to stainless steel appliances and certain color palates), mortgage interest rates and consumer confidence as well as the time of year and current market activity (real estate activity is seasonal and activity drops off in the fall/winter and picks up in the spring/summer) . The additional factors are property-specific, such as whether you’ve made upgrades and renovations and the overall level of finish of the home, whether your roof, windows, furnace, etc. were recently replaced, whether your home offers a full or partial basement and if this space is finished or unfinished — just to name a few.
Other factors include the property’s specific location and whether it’s desirable for potential buyers. For example: Is the home located on a wooded or ravine lot, or one that backs to a busy road or power lines. What school district (or specific school within the district) does the property feed into? Is the property subject to municipal taxes a comparable property down the street in another municipality would not be? The AVM tools do not take these critical factors into consideration!
3. A Realtor’s experience is critical in this process
As real estate agents we perform what is known as a comparative market analysis, that is a “CMA”, for every property prior to listing a home for sale. This analysis is as thorough and in depth as an appraisal and includes a visit to the property and an inspection of the home, the neighborhood, everything that will help pin down the market value and the appropriate listing price range for the home. This gives the Realtor the opportunity to make suggestions on what sellers can do to improve the value of their home including repairs and upgrades that offer the highest return on investments as well as those that don’t pay off, as well as staging tactics to enhance the homes appeal to the broadest segment of the market. Furthermore, this gives the Realtor the ability to “articulate” to potential buyers why the selling price is the right price!
Preparing a CMA is an art, not a science. These isn’t a simple mathematical equation or even a complex computer algorithm for determining a home’s value. Rather it requires an in-depth, thought-out CMAs require extensive knowledge of the dynamics of property sales in the specific community or neighborhood. The Realtor makes judgments based on their deep understanding of the local market and the countless peculiarities that affect price, such as lot size; location; features of the lot, including its terrain, access and privacy, improvements and amenities, condition and level of finish, quality and age.
While your agent will know that a larger contemporary home, the appearance of which is out of step with the neighborhood or buyer tastes, will likely sell at a discount: An AVM will count only its square footage, and come up with a valuation that is too high.
Every home is unique and must be valued accordingly.
Get it wrong and you risk deterring buyers, or not getting the money you deserve on a sale. There is an inverse relationship between the time a home sits on the market and the amount a home sells for and it’s critical that a home be priced accurately! Want to know what your home is worth? Click here to request a free CMA Valuation of your home.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235