Ways to Ensure Accurate Home Valuation Before Listing

 

 

 

 

An accurate estimate of real estate value is necessary for a sale process since it determines the asking price. Property valuation estimates the current worth of all future benefits that may arise from owning a specific property.

Pricing your home well can determine the type of buyers you attract and the time it takes to sell the property. Overpricing a home may discourage some prospective buyers willing to acquire the property. While formal appraisals determine the present market value, you can use the following tips to conduct a property valuation before listing.

1.      Consider the Prevailing Market Conditions

Market conditions are conceptual elements that affect the demand and supply of real estate properties. Demand and scarcity in the real estate industry can help determine whether you are in a seller's or buyer's market.

When more people are shopping for a real estate property, but the supply is scarce, you are operating in a seller's market, which boosts the value of a given property. On the other hand, when few people are looking to buy homes but the supply is plenty, the buyers have the upper hand because the overall property value decreases. You can increase or reduce your pricing during a home valuation in Kansas city, depending on prevailing market conditions.

2.      Sales Comparison Approach

When evaluating a residential property, you can start the estimate by studying about five comparable properties. Ideally, you should select homes with identical sizes and styles within the same neighborhood that sold in the last few weeks. The closer the comparable sales, the more accurate your value estimate will be.

However, it's necessary to adjust the value of your comparable sales so you can accurately determine the price of your home. For example, if a comparable sale has a luxury swimming pool and your property doesn't have one, it is prudent to subtract the price from the estimated value of your property. On the other hand, if your property needs significant repairs, you should add the repair cost to the estimated value.

3.      Online Valuation Tools

Automated valuation model tools use public records like deeds, property transfers, and tax assessments to compile a mathematical model that predicts a home value based on previous sales and prices in a specific area.

Most valuation tools found on real estate websites are geared toward marketing purposes and lead generation. They can assign value for any property even when critical data is missing, meaning the accuracy is not perfect.

On the other hand, valuation tools used by lending platforms and professionals are significantly different. The tools leverage a confidence score that indicates how close the estimate is to the actual market value. For instance, a higher confidence score means your estimate is close to the current market value. While professional property valuation tools can give you an accurate estimate of your property's value, it's prudent to consult a real estate expert in your neighborhood and gather more insight.

Endnote

Every property transaction is based on an accurate evaluation, and it's an essential element for buyers and sellers alike. While skilled experts perform the appraisals, anyone participating in real estate transactions should understand the valuation process.