If you're reading news publications, consuming social media posts, and/or watching the evening news, then you have probably been hearing a lot about the housing market and how home prices are increasing by healthy percentages around the nation.
What does this really mean to you? If you saw a report that said home prices increased by 5% since this time last year, does that mean that the value of your home increased by 5%?
What it really means is that the average or median price of homes that sold increased by 5%. Your home may have not increased in value at all, or it may have increased by 10% or more. It depends on where your home is located, and specifically, your particular neighborhood. It also depends on the condition of your home as it relates to average homes in your neighborhood.
Don't be mislead by the websites that display the market value of your home . . . they are often wildly inaccurate. There are only two ways to get an accurate determination of what the value of your home is today.
The first way is to hire a licensed appraiser to determine today's market value of your home. An appraiser will come to your home, take measurements and notes, spend considerable time gathering information about your home and your neighborhood, and provide you with a detailed report of how the value of your home was determined. The cost of an appraisal depends on the location, type of property, square footage and type of report (which is based on the purpose of the appraisal). A standard residential appraisal can cost $250-$1,000 or more, but averages around $300-$500. Here is an example of a professional appraisal report, courtesy of Fannie Mae.
A professional appraisal report is most often ordered on residential properties after they are under contract and are ordered by the lender, or may be ordered by an attorney settling an estate or working on divorce proceedings. Homeowners rarely order appraisals on their own.
If you want to determine the market value of your home because you are thinking of selling it sometime in the near future, then contacting a real estate agent is the way to go. A professional agent will perform much of the same processes as the appraiser, but will actually sit down with you after their market analysis has been completed and go through the report, explain how the value was determined, and answer all your questions. Oh, and it's free of charge and obligation. It's a process agents perform as part of preparing to list a property.
An agent's report is usually called a Comparative Market Analysis and will contain much of the same information as an appraiser's report. The agent will gather the information they need about your home on the initial visit. Then they will verify public records, and compare your home to similar properties that are currently listed, under contract (pending), recently sold, expired or withdrawn from the market. They will look at price per square foot, how your home stacks up against competitive listings, and their knowledge of the current market, whether it's a buyer's market, seller's market, or neutral. All of these factors are important to determine the market value of your home.
To learn more about how a professional real estate agent determines the market value and optimum list price for your home, read our article Pricing Your Home To Sell.
Coldwell Banker Residential Brokerage - McMullen Office has over 170 highly-skilled and trained professional real estate agents that service a wide geographic area including Chicago and its Northwest Suburbs. Please contact us to determine the value of your home.