Prior to listing one’s property on the market, there is a lot of important steps that must take place. Some of the most obvious ones include fixing the property up, determining what real estate agent to use, negotiating, and more. Before getting to the point of actually making a sale, however, there is something that must be explicitly stated — the home’s price.
Naturally, as with everything that requires skill, one can easily outsource their home’s valuation to an expert. In other words, they can hire a specialized appraiser who will examine the house in detail and suggest a reasonable price. And although it is beneficial to have an expert-set valuation, it comes with some downsides. The most obvious one is the additional cost that must be taken into account. For instance, a basic valuation of a single-family home normally ranges anywhere from $300 to $500.
Figure Out Your Home’s Value Yourself
Obviously, there is an easy way to get around the appraisal fee. Instead of hiring someone to do the heavy lifting, the homeowner can just learn how to value their property and figure out a price on their own. It is fair to expect that there will be a slight discrepancy between this price and the one that would have been set by the professional. After all, the education and training that the appraisers possess allow them to almost always be closer to the true intrinsic price. Nevertheless, those differences can be so marginal that it would be more cost-efficient to simply do the work yourself.
Start with the Online Tools
The saying “beware of the internet” is generally right when it comes to unproven advice. In this case, however, online tools that have been programmed to make home valuation easy are the most useful resource that one can start the process with. The formal name that is used for online estimators is the “Automated Valuation Model.” Expectedly, there are probably hundreds of different ones that people can choose from.
The way that these programs operate revolves around algorithmic calculations that take into account a seemingly endless input of data. First, they look at one’s location to identify which factors will be applicable to their area. Then, they cross-reference the current listing prices of similar properties with some of the latest deed transfers and create a mathematical model. The best part? All of this takes less than a few minutes. After all, the entire calculation is handled by highly sophisticated software that can run through hundreds of factors in a matter of seconds.
Individuals who decide to go with automated valuation models should still conduct a fair amount of research. The reason why is that there might be noticeable differences between certain models and the suggested price could be severely under or overstated. To avoid such scenarios, people should always go through a few different online valuations and try to derive the average. According to a real estate company from Idaho, Homes of Idaho, some of the best providers include:
- Realtor.com
- Zillow
- Chase
- Trulia
Do Real-Life Comparisons
After getting the results from the automated valuation models, homeowners should cross-reference their numbers with the latest sales that occurred in their region. This is because there might be a slight delay and the online models may not have the records of the most recent transactions yet. So, according to Homes of Idaho, there is a chance that those prices would be omitted from their algorithm. Moreover, connecting with other homeowners who have just gone through the process of selling their property can be extremely helpful as they will have a very recent experience. Thus, they can guide one through the venture and give them some important tips about reaching the highest amount of profit.
The Intangibles
Regardless of whether one uses online valuation models or an actual appraiser, they always have to think about the intangibles. For those unfamiliar, these are all the inputs and elements that are borderline impossible to quantify due to their non-numerical nature. For instance, a great example of an intangible that affects home prices can be all the memories that the homeowner has from that property. So, it is important to realize that the price needs to reflect this emotional connection as most homeowners will not part from their beloved houses unless they are decently compensated for it.
