If you ask someone how much their home is worth, they tend to overestimate it. Everyone wants to think that their home is a little bit better than it actually is. If you’re selling your house, it’s important to know what its true value is. Figuring it out on your own is pretty difficult though.
There are websites online that will give you estimated home values, but they’re not very accurate and you can get a much different estimate from one site to the next. If you want to know how much your home is really worth, it’s best to talk to a real estate agent.
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Real estate agents determine home values by doing what is known as a competitive market analysis or “CMA” for short. When figuring out the value of a home, a real estate agent will look at the property location, the condition of the property, and the condition of the housing market in your area. They will take into consideration things like the age of the home, the square footage, the number of bedrooms and bathrooms, whether any recent updates have been made, and a number of other factors. They will then look at what similar homes in the area have sold for recently and whether the market is trending up or down in general. Using all of this information a real estate agent can give you a very accurate estimate of what you would be able to sell your home for.
Before someone purchases a home it is common to get an appraisal because most lenders want to know what a professional thinks a house is worth before they are willing to loan money against it. A real estate appraiser focuses primarily on sales that have closed recently and pending sales in order to determine the value of a home. This can be fairly accurate but a real estate agent takes things a step further by also looking at current listing prices, available inventory, and the average amount of time it takes for a property to sell. In addition to all of that, hiring an appraiser costs money, but a real estate agent will often conduct a competitive market analysis for free.
Of course it’s important to point out that determining the current market value of a piece of real estate is not an exact science. And ultimately, a home is worth whatever someone is willing to pay for it. But real estate agents live and breathe the markets they work in and that experience ensures that you will be getting the most accurate valuation possible.
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