Determining Your Home’s Accurate Market Value

I recently contributed several hours to the Keller Wiliams booth at the Gig Harbor Maritime Festival, our town’s annual kick off to the summer season. Somehow the first weekend in June always turns out to be gloriously sunny, and a significant portion of the town’s population turns out for the parade, live music, street vendors, and the “blessing of the fleet,” harkening back to our fishing village roots.

At our booth, in addition to offering kids’ activities and a raffle for a wine basket, my colleagues and I endeavored to engage festival-goers with the teaser, “Would you like to find out how much your house is worth?” I was surprised by the number of people who were confident they already knew.

Do you know what your home is worth? I mean, do you really know its accurate value in today’s market?

With the advent of real estate search engines like Zillow and Red Fin, and our increasing reliance on technology, there is a general assumption that the app on your phone is accurate. Not necessarily.

House values can be determined in several ways. There is the tax assessed value, which is the formula your local government entity uses to determine the taxation value of your house and land. Then there is the market value determined via a professional consultation with a licensed real estate professional, which factors in square footage, amenities, location, and, most importantly, what similar houses have sold for within a reasonable distance from your home.

I used my own house as a test case and was surprised, although not really, to find a more than $100,000 spread between four different real estate apps. Most apps rely on algorhythms and public records to determine house values. Depending on their public record source, the information will vary based on the accuracy of the record. I’m sure this contributed to the erroneous values assessed to my own house, considering that, between the various reports, there was up to a 1000-square foot difference in the stated size of my house! (This is probably one reason why one of the best-known real estate search engines is currently being sued for inaccurate valuations.)

It’s important to remember that these discrepancies exist. If I were a seller, I would obviously want to sell my house for the highest price possible. And if I were a buyer, I would want to purchase for the lowest price. In the case of my home’s online assessed value, that could be a $100,000 discrepancy! That’s why, when it comes to determining your house’s value, it’s imperative that you enlist the help of a real estate professional to be your expert advisor.

In the current frenzied market (at least, in our area), it’s easy to become emotional and get caught in the trap of overpaying for a home just to have the winning bid. It’s not uncommon these days to see a house deliberately listed below market value, in anticipation of a bidding war between prospective buyers that can actually take the price far over market value. Don’t get sucked into this trap!

What I do for both my sellers and my buyers is to systematically assess a home’s true value. This takes into consideration:

  • location
  • size of house and property
  • number of bedrooms and bathrooms
  • overall condition of the house and property
  • age of the home
  • degree of finish
  • energy source and heating/air conditioning
  • fireplace and if so, what kind
  • kind(s) of flooring
  • number of covered parking spaces

All of these factors and more go into a systematic process of determining the value of the home you want to sell or purchase.

So back to my original question: Do you know what your home is worth? Perhaps you are pausing now before answering, because you realize the answer isn’t necessarily found in an app or an assumption. That’s where your local real estate professional can be an invaluable asset. Call for an APP-ointment today; it’s the most accurate real estate “app” at your disposal!

Doug Lawrence is a licensed real estate broker with Keller Williams West Sound in Gig Harbor, Washington. His mantra, both personally and professionally, is “love where you live!” He is an avid fan of the beautiful Pacific Northwest and enjoys helping people find their perfect fit. You can find him at www.douglawrencerealestate.com.

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