This week’s Q&A column is sponsored and written by Kim Peele and Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-5852 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: How much is my home worth?
Answer: Whether you just bought your home or you have owned it for years, it’s always fun to keep up with the current value and to see how your investment has appreciated.
As interesting as it is to see the recent sales and speculate your home’s worth, it’s important to note that many homeowners get a false idea of value by looking at online sites and other assessments. While those sources offer estimates of home value, most of them are not accurate and are just very rough approximate values. This is fine if you are not planning to sell anytime soon. However, it is super important to know the correct value range when it’s time to put your home on the market.
Your most important resource for a true value assessment of your home will be an experienced professional Realtor.
First, let’s talk about where homeowners tend to find information on home values. Everyone gets a city or county tax bill, which includes an assessment of value. The tax assessed value can be much lower or much higher than what your home would actually sell for on the open market. In most cases, an assessor has never seen the inside of your property. They use a software program based on sales data and a rough comparison of property features. Their goal is to provide a tax bill for town revenues, and they are not purporting to be an accurate source of value.
Another popular, yet misleading, source of home data is online valuation sites. Zillow is the main one that homeowners cite when discussing value. However, as with most of the online sources, Zillow gets its information from a combination of county websites, user input and recent sales. They publish their margin for error on their website, and in many cases, the error range can be significant. For instance, in Arlington County, Zillow lists the median error rate as 2.5%, so their valuation of a $1 million home is likely to be off by $25,000 or more. In other areas, the error rate is even higher. To view the Zillow margins for error in Virginia, check out Virginia Data Coverage and Zestimate Accuracy.
Another frequently used source of value is the neighborhood grapevine. Your neighbor sold their home, had multiple offers and it sold for well above list price. You think that your home is better than their home, and therefore, you decide that your home value is even higher. Unfortunately, unless you are planning on listing your home within a few weeks of your neighbor’s sale, this data can be unreliable. The real estate market can change drastically in just a short period of time, and it is important to look at not only comparable sales, but also the most recent ones. And, of course, the ages of the roof, HVAC, windows and other features must be accounted for in a value calculation.
So, as you can see, county assessments, online sites and neighbors are frequently used unofficial sources of home value. It’s fine to keep tabs on the market using these sources if you just want a general idea of value, but when the time comes to get serious about selling your home, it’s time to drill down into the details to determine value.
When the time comes to sell your home, what do you do to determine a good list price?
First and foremost, consult an experienced Realtor. A good full-time Realtor sells 20+ homes a year, brings lots of experience to the table and knows the nuances of pricing a home for sale.
Before you ever sell your home, your professional Realtor will prepare a Comparative Market Analysis (CMA). A CMA will take into account a wide range of very specific information, and most importantly, will include data on all sold homes in your area within a 6-12 month period.
The CMA will compare an array of features including: square footage, number of bedrooms, number of baths, style of residence and number of stories. Once the size is closely matched, then the qualities and updates of the home should be studied and factored in. This will include things like size of lot, orientation of the lot, your home’s location in the neighborhood, the age of roof and windows, upgrades to kitchen and baths, type of floors, and more. All of this will be compared to recently sold homes of similar size, to determine a value range for your home.
Lastly, your Realtor will discuss your home’s value range with you and make recommendations on what the best list price would be to drive buyer traffic in to see your home. A great Realtor will be able to suggest a list price that ends up being very close to the final sale price. Ideally, you will have chosen a list price that appeals to buyers and is supported by all the features of your lovely home, resulting in a quick sale at top dollar!
For a no-obligation Comparative Market Analysis for your home, reach out today to Kim and Hope Peele at 703-244-5852.
Kim Peele is a licensed real estate agent with McEnearney Associates, Inc., lives in Old Town and works in VA, DC & MD. She and her daughter Hope Peele are The Peele Group. Kim is a second generation Realtor and fourth generation Washingtonian and is dedicated to helping owners through the challenges of selling their home.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria
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