Hello Brad Van Mill here with Fish MLS Realty . And today, I`m going to be talking about how you can know what your house is actually worth and I’m going to be sharing with you the three best free ways of getting that information Alright so what really is the value of a home? You’ve probably heard that a home is worth what someone is willing to what? What someone is willing to pay.
So today , I’m going to be walking you through your best guess on knowing what something is really worth before someone is actually willing to buy it because that’s really the catch 22 of the game .
I’ve got a house I want to sell it and I can’t really know what it’s worth until someone else actually buys it. So how I get enough hindsight to figure that out. So to the dive deep into this, first you have to understand the difference between the actual value of the home and the perceived value of the home.
If it’s your home and you live there for example, you’re probably super attached to your home and you’re probably thinking most people do that their home is maybe even worth more than it might actually be. Our emotions tend to get in the way and distort reality.
The perceived value of the home however doesn’t change the actual value. And so for example, you might have taken your own home and done a lot of upgrades, done some things to make it look nicer and give it a greater appearance but in actuality, this is this, these are the hard facts of life. A home isn’t only just worth what someone else is willing to pay but the base value of a home really comes down to, how big is the lot that your home is sitting on? and how much square feet it is.
So for example if you filled your homes with significantly higher furnishings, that doesn’t necessarily bring up the value of your home.
If for example you decided to put in a gold toilet in your bathroom, because you’re thinking this is my home, this is my throne room, I’m going to have my my toilet painted with gold leaf and I spent ten thousand dollars doing it hence the whole must be worth ten thousand dollars more.
I got news for you, I’m going to Home Depot and pick up a a piece of porcelain for $79 and your $10,000 toilet does not elevate the house is value ten thousand dollars, what it can do, is increase a perceived value and per increased perceived value at best will only make sure that your home gets under contract faster and you can fetch top dollar. But top dollar compared to low dollar is a really small margin. So the next question is, How do I actually then get my best guess on what what my home might be worth if I can’t really take into account my home furnishings? There are three free ways to get a concept of what your house is worth and I’m going to share all three of these with you in order of importance.
Let’s start with the least important. The first one is what’s called a tax evaluation. Alright? So your local county is going to do in a value assessment of your property and they’re going to get slow because if they push that number too high all the residents get upset because your local taxes on your property is going to be based on that tax evaluation. So your home might actually be worth $200,000 and your tax evaluation might be for 130 or 150 or 160 thousand, it’s guaranteed to be low but it starts giving you a basic concept.
Next from there, look at the insurance you pay for on the house. The insurance company they want to know that if the house burnt down and they had to rebuild it, how much money are they going to have to put in? Again it won’t tell you what your home is worth but at least tell you what the replacement cost is. This is actually, this little bonus content? is that if the home is worth a lot more than the replacement value, guess what?
you’re in a bubble and sometimes people want to know, are we in a market trough? or a bubble? Because bubbles what? bubbles burst. Alright.
But this is by far the third and most powerful technique for figuring out what your home is worth and it’s doing what’s called a comparable market analysis.
And a realtor has access to your local MLS, your Multiple Listing Service. And they can basically take other homes like yours that have sold or that are listed and do a comparable and basically average them against each other. This one has one more bedroom, this one has one less bedroom. This is a slightly bigger lot, slightly older lot, slightly newer home, slightly older house.
Make some adjustments and basically try to best guess what your home is worth so you know what to list it for.
Here you need to watch out. Realtors in general, I don’t want to call them a dishonest lot, they’re powerful and they’re useful group of people. But a realtor is also hankering for a commission which means they have to secure your listing. And if they want to get your listing, they tend to tell you that your home is potentially worth more than it might actually be.
Why would they do this? Because if you’re talking to another realtor, generally you’re going to like the price that sounds bigger. So your realtor sometimes gives a little bit. I don’t think they’re walking around trying to lie.
They’re just trying to score some business.
That’s why it’s important for me to work with honest Realtors that know how to be accurate and precise. Because I’m doing thousands of homes. Thousands! which means that I can’t afford to work with people that use hyperbole and exaggerate up or down. But a comparable market analysis by far is going to get your your most accurate representation.
So how do you find one of those? Well first of all, you can comment below in the video space. Click a link and get in touch with my team. And my team will do a free game plan and a free analysis to help you know what your home is worth and whether you can refinance it to buy more investment properties, sell it to buy more investment properties, or just give you an upper hand and tell you what they think that it’s worth. Friends, thanks for watching this.
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