Whether you want to sell your home in the future or just want to have greater control over your properties, it is important that you know its market value. A home’s market value is a professional opinion of how much your property would sell in a competitive market. Your home’s market value doesn’t necessarily have to be the same as the market price. The market price could be lesser or more – it depends on whatever the price the seller agrees for the property. A seller may sell his/her property for a lower price compared to its original market value because he/she needs money.
The market value of a home doesn’t depend on personal reasons such as selling a home due to career relocation, death of a family, undergoing a divorce or under a lot of pressure to sell it quickly. Market value is an estimated and educated opinion which can be reliable or accurate especially if the right method is applied and every important detail is considered. Here are several factors which might affect your home’s market value:
- External characteristics. The curb appeal of your home and the overall home condition. It also includes the size of the lot, the architectural style of the home, water and sewage system, and paved roads. Everything outside your home is included.
- Internal characteristics. The inside your home matters such as the construction quality, appliances, HVAC system and the size and number of room.
- Law of supply and demand. If there are more buyers than the number of homes for sale, your home’s market value is surely higher. How quickly the homes in your area sell are another factor to consider.
- Location. Homes located in desirable places are most likely to have higher market value. For example, a home located near the school or cities will sell higher.
Is your home comparable?
If you want to know if your home for sale is comparable, there are certain things that you need to look for such as lot size, home style, age and location of the home. However, if you notice that the characteristic of another home is not identical to yours, you need to adjust the sale prices of the comparable properties.
For example, if your home is 1000 square feet with 2 bedrooms, 2 bathrooms, and 1 garage and is built 5 years ago. When you do a research, you come across three comparable properties recently sold at a certain market value. However, you notice that not all characteristics are the same. Property #1 is located in a less desirable neighborhood and property #2 has 3 bedrooms and property #3 is almost identical to your home. What should you do? The best thing to do is to compensate for these differences by adjusting the prices. In doing so, you will have a rough estimate on your home’s possible market value.
To find comparable sales, you can go to your local assessor’s office, municipalities, online database or directly from real estate agents. Learning how to determine the market value of your home can make the selling phase much easier.