Determining the value of your home can be tricky. There are a lot of variables that go into pricing a home. How much your home is worth is not based on what you bought the house for,
How To Determine Your Homes Value
Determining the value of your home can be tricky. There are a lot of variables that go into pricing a home. How much your home is worth is not based on what you bought the house for, the money you put in to make improvements or the fact that your best friends drunk uncle insists he would pay a million dollars for your house.... if he had a million dollars. Your property’s value is what a buyer is willing to pay in the current market. To determine that value, you need to look at similar homes in your area which have SOLD within the last 6 months. Current listings are not a good indication of your homes value but can give you an idea of your current competition.
Below are the necessary steps to determine your homes value...
1. Look for homes that have recently sold in your area, or nearby neighborhoods, which have sold within the last 6 months. If you're working with a Realtor, they can typically assist you with this; real estate agents have access to the MLS where most recent sales are reported. If you are not working with a Realtor, you will have to look online or at public records at the county clerks office to see recent home sales.
2. Choose homes that compare to your home in as many ways as possible. Select homes with similar square foot size, with no more than a 500-square-foot difference plus or minus.
3. Adjust the final sales price of each comparable home by adding or subtracting the sales price based on what the home has (or dosent have) that your home doesn't have (or has). If the home your comparing to your property to is newer, larger or has an additional feature, add to the final sale price to adjust for the difference. If your home is newer, larger or has an additional feature that the comparable does not have, subtract from the final sale price of the comparable home. This is the most difficult step in the process, as the amount you add or subtract varies by where you live. The amount is usually much less than the actual cost of the feature.
4. Add together the adjusted, final sales price of each of the comparable homes and divide the total by the amount of comparable homes to get an average adjusted final sales price. This is the estimated value of your house.
Josh Murray is an Associate Broker and Team Leader at Keller Williams- Top Michigan Realty Group, a firm that specializes in all aspects of Residential Real Estate in Metro Detroit. Josh Murray receiv....
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