Until your home sells to a willing buyer and the sale is closed, nobody knows for sure how much your home is really worth. But there are three methods that will help guesstimate your home’s fair market value until you actually close the sale:
1. Internet market-value estimates. Don’t laugh! In the last few years, computerized Internet market-value estimates for houses and condominiums have become remarkably accurate. My first experience with an Internet appraisal was three years ago when I obtained a home equity credit line secured by my vacation-home condo. I estimated it was worth $125,000 at the time. But Wells Fargo Bank used a computerized appraisal to determine the market value was $150,000 so they approved a $100,000 credit line without a formal appraisal.
Purchase Bob Bruss reports online.
Today, homeowners can obtain free Internet market-value estimates from several sources. The newest is at www.Zillow.com. This advertiser-driven Web site seems quite accurate, based on several properties I entered where I am familiar with their market values.
However, Zillow doesn’t yet cover the entire nation so don’t be disappointed if your home isn’t included. What I found especially amazing is Zillow includes, in most situations, an aerial photo of the property and even the lot boundary lines! In another situation where I entered a condominium along with the value estimate, Zillow included a map showing the precise location.
Other free Internet residential market-value-estimate Web sites include www.HouseValues.com, www.OurHomesPrice.com, www.HomeGain.com, www.Domania.com, and www.PriceaHomeOnline.com. However, these Web sites often require you to allow a local real estate agent to contact you about selling your home.
But a $40 paid Web site offering a comprehensive CMA (comparative market analysis) is www.USHomeValue.com. These Web sites should be considered just a starting point for estimating your home’s market value. The sites don’t evaluate the most accurate condition of your residence, as you many have added recent improvements that could increase its market value.
2. Hire a professional appraiser. Especially if you are thinking about selling your home alone without a professional real estate agent, having a professional appraisal made could be money well spent. Depending on the size, location and uniqueness of your home, the cost should be in the $300 to $750 range. Be sure the licensed appraiser is experienced appraising in your community and is not from a distant area. A good source is to ask your local bank or other mortgage lender for two or three names of recommended local residential appraisers.
3. Interview at least three successful local realty agents who sell homes in your vicinity. Even if you plan to sell your house or condo “for sale by owner” (FSBO), known as a “fizzbo sale,” please interview three or more local realty agents before you decide.
They won’t mind, even if you let the agent know you are thinking of becoming a FSBO. The reason is agents know most FSBOs, within 30 to 60 days, simply give up and list their homes for sale with a professional agent, usually one of the agents they already interviewed.
The primary reasons to interview three agents are you will (a) learn what is involved with a home sale in today’s market, especially all the disclosures required by state and local law, plus the forms used by realty agents in your community, and (b) receive each agent’s CMA (comparative market analysis) form. The CMA includes at least three recent sales prices of comparable nearby homes, the asking prices of similar neighborhood homes (your competition), and even asking prices of recently expired nearby listings (which were probably overpriced).
Some agents even advertise for FSBOs, such as “Thinking of selling your home without a professional realty agent? I’ll help you sell without a listing by giving you a FREE evaluation of your home’s market value.”
The reason it is so critical to interview at least three successful local realty agents is to compare their CMAs. Watch out for any agent who estimates a high market value for your home without justification shown on that agent’s CMA. This is called “buying the listing” by estimating a high sales price. Later, when the overpriced home doesn’t sell, the agent will suggest a price reduction. However, by then you will have lost the initial sales momentum that occurs when a home listing first hits the local market.
Or, if an agent thinks you won’t be interviewing other realty agents, he or she might talk you into a low listing price, hoping to make a fast easy sale by creating a “buyer frenzy” with an ultralow asking price. Only by interviewing three (or more) agents can you compare their CMA justifications for recommending an asking price.
(For more information on Bob Bruss publications, visit his
Real Estate Center).