Knowing how much your home is worth is the first step in selling it at the right price. But doing so involves a complex process that needs careful planning and investigation.
Here are your options.
Online home value calculators
These tools rely on public records like property transfers, deeds of ownership and tax assessment, plus mathematical models to estimate how much your home is worth. It uses the latest sales and listing prices in the neighborhood to come up with ballpark figures. Most of these tools are free, easy to use, and up to date. But they don’t take into account factors that affect the value of your home like improvement and repairs.
The FHFA’s House Price Index Calculator
The Federal Housing Financing Agency’s house price index calculator uses a more scientific approach. It studies millions of mortgage transactions that date back to the 1970s to estimate home value.
Comparative Market Analysis (CMA)
All real estate agents use “comps” to estimate much a home is worth by comparing it to similar ones in the seller’s neighborhood. Comps look at the size, condition, style, and location of homes that are as close to possible as the seller’s own and base home values on these factors. It allows sellers to come up with a fair asking price.
Broker Price Opinion (BPO)
The agent studies the property by taking photos, examining the neighborhood, and getting six comparable properties in the MLS. This is useful for short sales or foreclosures, not the usual home sales. The Appraisal Institute offers information on BPO Laws.
Conducting your own analysis
You can compare your home to others in the neighborhood. Analyze similarities and differences in age and size, sales history, general condition of the home, listing price vs. actual sales price so you can come up with your own ballpark figure.
Professional home appraisal
Hiring a professional to do the job makes it easier for you to come up with a figure you can take to the bank – literally, in the case of buyers, as lenders require a home appraisal before approving their loans. A professional appraisal will take into consideration market forces (region, city, and neighborhood where the home is found), the property itself (condition of the house, including land improvements), and comparable properties (sales, listings, vacancies, depreciation and other characteristics of similar homes in the same market level).
It’s important to determine the value of your home so you assess your overall financial health. If you’re selling, you’ll know how your home stacks up against similar homes in the neighborhood. If your home has been appraised on the lower end, you may want to undertake improvements that will raise the value of your property before you sell.
Note, too, that property taxes (which you can appeal), insurance premiums, and other lines of credit are based on home value.
If you need more help in assessing the value of the home you want to sell in Newport Beach, CA or its neighboring communities, get in touch with Clarence and Jennifer of the Yoshikane-Toyama Real Estate Group. Call 714.501.7132 or contact us here to get started.