 Q: How do I find out how
much my home is worth today?
Some of the methods people use to try and establish the value of
their property include:
- Applying an annual percentage increase to the purchase price.
- Adding the cost of improvements to the purchase price.
- Using the town's assessed value.
None of these methods will give a true value for the property. In
fact the only way to truly determine the value of a property at any
point in time is to discover what a buyer is willing and able to pay for
a property by selling it.
Like it or not, property value is governed by basic economics, no
matter what value we might like to put on our homes. This is because the
value of property is a function of supply and demand; the more similar
properties there are that are available when matched to the demand for
that type of property, the lower the value of the property. Conversely,
if there is high demand for the type of property you have and fewer of
these properties in supply, the price will be higher.
In order to sell a property, you need to get a pretty good idea of
what a buyer will be willing to pay for your property at the time you
want to sell it. In the USA, one of the best ways to do this is to get a
Comparative
Market Analysis or CMA. A CMA determines the value by comparing your
property to similar properties in the area that have sold recently. Any
good Realtor will be able to give you a CMA for your property or you can
ask a local Home Investor Specialist for a complimentary CMA.
There is little point in determining the value of your property
through a CMA unless you are about to sell it since the value of
property can change very quickly in a matter of months. To get an idea
of your property's current value, you can easily tour around similar
properties that are for sale in the area. Although the listed selling
price is not always a good indicator of the actual price a property will
sell for, taking an average across a number of properties will be a good
enough approximation.
However, if you are serious about selling, get a proper CMA or
valuation done by a Home Investor Specialist or real estate
professional. Once you have a CMA, you will have an idea of the range of
values your property will fit between. Adjustments will need to be made
to take account of variances between your property and those in the CMA.
(Again, your local Home Investor Specialist can
advise you on these adjustments).
Once you have an idea of the value of the property, you are ready to
figure out the
optimum selling price!
   
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