There are a number of variables in determining a home’s value, and although many people feel that their home is priceless, emotion cannot be a factor in property valuation.
Certainly, any home will have intangible amenities that appeal to emotion without adding monetary value, such as ambience, paint color, or sentimental value. But these are subjective things.
Determining the market value of a home is a matter of weighing the subject property against similar homes in the area over a short period of time, comparing like properties and their sale performance, usually over the past six months.
Market value is the price your home can be expected to fetch on the market in its current conditions and based upon the willingness of buyers to spend and lenders to underwrite. Market value is not the same as appraised value, and assessed value (for taxes) is not the same as market (buyer) value or appraisal (bank) value.
A Realtor will find homes that have sold in the past, and narrow down the search to your area of town, similar square footage and house style, similar age of the home (within ten years either way, generally) and begin the comparison.
Factors affecting home market value include number of bedrooms and baths, square footage above grade, basement square footage finished, whether the home has a walkout or daylight basement, number of garage stalls, age of the roof, heating system, number of fireplaces, extent of upgrades, curb appeal, locational appeal and other factors.
Each comparable property is adjusted by a dollar amount for amenities it does or does not have compared with the subject property, and these adjustments are added or subtracted to the comparable property’s sale price to give an estimate of what the subject property might sell for based on how it compares with homes recently sold.
For example, if your home is the subject property and the house down the street is a comparable property that recently sold, you can expect the fact that your house has three bedrooms and the other house has only two to work in your favor and add market value to your home compared with that one. If, on the other hand, the house down the street has a fully finished basement and yours does not—you can expect that your home might not compare as favorably since basement finish does add value to a home.
In Lincoln, we are fortunate to be able to click onto our County Assessor’s website and see a tax assessed valuation of just about any residence in the county. The caveat to this is that these are assessed values, not appraisals or market values. It’s important not to base your entire opinion of a property’s market values on the dollar amount assigned for the purpose of levying property tax.
If you are interested in learning about your home’s market value, let us know! We can help you find out about how home values are trending in your area by filling out a simple form HERE. And if you’d like to visit about a detailed market analysis of your home, you can always call us to set up an appointment for a member of our team to tour your home and meet with you about its prospects on the market.