WHAT IS YOUR HOME WORTH?
The first step in selling your home is knowing the difference between value, worth, and price. Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived.
ONLINE HOME VALUATION
A place to begin researching a rough estimate of a home’s market value is online. Several free online tools provide an estimate of your home’s current value based on recent comparable home sales in your area, using a comprehensive database. The downside of these systems is that the assessment is based on available public data, with no guarantee of accuracy, and often use an algorithm that simply averages comparable sales in the geographic area. These are quick and easy, but do not answer questions regarding factors like location and current local trends. Be aware that in practice, the prices arrived at might be highly inaccurate. For example, a home in Ohio was put into one such system, Redfin (https://www.redfin.com/what-is-my-home- worth). The home last sold for $180,000 in 1998 but that amount is no longer accurate; it was appraised for refinancing in 2015 at $275,000.
PROFESSIONAL APPRAISAL
The purpose of a real estate appraisal is to determine a practical estimate of the property’s value, based on the real estate market in the area. How much would the average buyer spend on this property? The problem is that almost every home differs from every other in some way. Even homes with identical floor plans, built side by side and by the same builder, may differ because of their condition and how they’ve been maintained, the size
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