Ask Phyllis!

Determining Your Home’s Value

Dear Phyllis,
I plan on selling my home next year and retiring in Nevada. I frequently attend open houses in my neighborhood and have checked my home’s zestimate on Zillow. I am curious as to how a real estate agent will determine my home’s value and how is this different from Zillow? Thanks in advance? Soon to be retired

Dear Retired,
There are several methods that Realtors® use to determine the value of your home.  The most common is to complete a current market assessment. This is a comprehensive evaluation of recently sold “comparable” homes in the past several months. In addition, a Realtor® should also examine active listings (your competition), recently expired listings and those which are currently in escrow.

“Comparable” homes (comps) should take into consideration, the size of your home, the number of bedrooms and bathrooms, updates, usable lot size, and the age of your home. In addition, the architectural style, floorplan and location should be taken into account, which is very difficult for online market evaluations to do.

Online valuations are similar to parlor games, fun but not to be taken too seriously.  When using online valuations understand that the estimate is just that – an estimate.  Zillow and other online home valuations are unable to take into account deficiencies such as functional obsolescence and incurable defects.  There is sometimes more to a recent sale than is readily apparent. Perhaps your neighbor’s home sold for a low price because they were overly motivated. Maybe they didn’t want to concern themselves with curb appeal or any inexpensive fix-its – perhaps they just wanted to be done with the selling process.  A Realtor® knows to never pay too much attention to one single sale. Their analysis should be weighed.

Online market evaluations generally use a computer generated home value based on calculations and formulas. How can a computer generated program know that the home down the street which just sold is on a busy corner? Or perhaps the home four blocks away was next door to high tension lines? Your home might be sited on a 10,000 square foot level lot while your neighbor’s 12,000 square foot lot is hillside.

Best of luck on your future move.