The past two years have been a roller coaster ride for most people, but there is a silver lining for those who are trying to sell their property. The price of homes has risen considerably and it is the ideal time to work that to your advantage. Talk to estate agents in Maidstone and sell your home or make good use of the newly found equity. While considering your options, a great place to start would be to ask the question – what is your house’s worth?
What’s your house worth?
Whenever you are considering getting a home value estimation, there are two main types of valuation to consider:
Fair market valuation:
A fair market valuation involves looking at your home through the eyes of a prospective home buyer and then comparing it with other homes in the same neighbourhood. The similarity quotient is based on the total number of bedrooms, bathrooms, outdoor space and square footage. When working with an estate agent, this will be the point where your estate agent will look at comparisons to understand how much buyers are willing to pay for a property that can be compared to yours.
Although the appraised value of your home matters when it comes to comparison, there is a difference in this approach from that of fair market value. To find out the appraised value, you need to bring in a licensed and professional appraiser who takes into consideration the location of your property, its size and condition along with any renovation works done on the property. Whenever a mortgage lender is involved in the buying and selling process of a property, it is the appraised value that matters the most in cases a borrower buys your home or decides to file for a refinance of their loan.
Here are some ways to find out your house’s worth:
Add your address to a home value estimator
This works best for anyone just curious about the value of a property.
Many online tools can help you find the value of your home and offer you a quick estimate. These tools are sometimes known as automated valuation models or AVMs. Such tools make use of algorithms and data that is available to the public, like recent sales and various tax assessments and help you with a generated estimate.
However one should always consider the estimates provided by these AVMs with a grain of salt as the data available to these tools might be incomplete and even incorrect. They also fail to take into consideration any recent costly renovations like a new bathroom or a revamped kitchen.
Consult an estate agent to get a free, comparative market analysis
This method works best for those who are considering selling a property
Almost all estate agents offer their prospective clients a comparative market analysis (CMA) to grab the opportunity of selling your home for you. To provide you with a CMA, estate agents will pull in data on recent sales of comparable properties in the area or neighbourhood. Next, they will use their knowledge of the locality and take into consideration all the special characteristics of your property and provide you with an estimate.
However, if there aren’t many sales in the neighbourhood or enough properties to compare, the data available to your estate agent might not be very accurate. Hence, the estimated value at hand will be far from accurate.
Get in touch with a professional appraiser
This is the best option for those people who need a professional home value estimate and will be using the data for a consultation with a mortgage lender.
Remember that any mortgage lender will hire a professional appraiser before approving a loan. The method used by an appraiser is similar to that of an estate agent who prepared a comparative market analysis for you. The best part about hiring an appraiser is that they are licensed professionals, and their opinion on the value of your house is completely objective.
How to use Automated Valuation Tools or AVMs?
AVMs or automated valuation tools are easy to use, and here is how they work:
- AVMs gather the postcode and then it tries to identify the exact property.
- Next, it gathers information on bedroom count.
- The next step involves AVMs pulling in all historical data on sales within a 5-mile radius from the Land Registry.
- If any specific property has been sold within the span of the last few years, then the data found through AVMs will gather significant weightage. But it also uses some kind of influence from other properties as well.
- If the above information is not found, then it will move on to a group of sales done from nearby properties.
- Some AVM’s reject any outlier data points, which enhances accuracy.
- Some adjustment variables are also applied for bedroom counts on the basis of how many bedrooms there are and how tightly packed the data point is.
- In the last few steps, AVMs apply some tuning variables that can be set at the agency level, depending on clients’ preferences. Some clients have a greater preference for AVM values, and some people undervalue them.
- Finally, it provides the user with information on similar properties that are currently available in the market. Some of them are picked from the above AVM estimation, and some of them are selected separately.
- Some AVMs display the kind of confidence level it has worked on, which typically means the nature of data that was available for the AVM to work with. If it had access to recent data and actual houses, then the confidence level is displayed as high. If it worked with old and scant data and did not have any specific house to latch on, it would display low confidence. But it depends on which AVM is being used.
In a nutshell,
It is crucial to carry out an evaluation of your property before selling it, and there are many ways of finding out the true worth of your house. We hope this guide provided you with the insights you require to make informed decisions.