Real Estate Values Are Always Local
What your home is worth today is determined by a factor that most people don't consider.
The single most important factor in establishing value in Real Estate is knowing where a property is located, whether it is your home, a commercial property, rental property or raw land - it's where it is located.
That means in what market will be the major determining factor of a property's value.
With the headlines on CNN, newspapers and magazines screaming the news that real estate values have dropped 20-30%, and I have heard it said as much as 50%, it's important you have an understanding of your property's value.
For most people their home is the only major investment they have.
With interest rates now at a 35-year low you may want to consider refinancing, or your own financial situation (because of job loss or another financial down turn, such as the stock market) could mean you will be considering selling your home or other investment property, just to continue meeting expenses.
If that's the case, you must know its present value.
This article is for you.
I was really surprised at what I discovered last week while gathering year end figures for our business, part of which is to assign the value movement in real estate in our local area (50 mile radius).
As we computed the actual difference in the average residential selling price (not listings for sale, but sold and closed homes) between 2007 and 2008, it was only down a little over 2%!This was really surprising, because I've been reading the same news as you and was braced for grim figures.
I have friends in other geographic locations who are reporting that for the same period their drop was more than 23%.
So my point is, you need to know the value of your property in your market location! Appraisals can be expensive and some lenders may require a certified appraisal before loaning money on your property.
However, if you have some equity, you should be able to find a lender that will accept a recent tax evaluation, and if they perceive you have substantial equity in your property you may not need one at all.
Most lenders will allow you to put the cost of a new appraisal in the new loan, and you might find a lender who will waive it.
So when talking with lenders, be sure to ask about that.
Anyway, in today's "financial crisis" world you need to know where you stand, especially if you are thinking about selling.
In a market like this where buyers are able to pick from many properties and make the best deal, you will have to spend extra time preparing your property to sell.
If you do a little home work you can establish a value that should be within a few percentage points of what an appraisal would be.
Before you start to determine the realistic value of your real estate, consider this first.
It's difficult for us to accept change and we all resist it, sometimes even subconsciously.
It is possible, when working with statistical information, to pick and choose what data you use and consciously or subconsciously alter the results.
If you don't control the urge to do that, your results will be of no benefit to you whatsoever.
You must accept the results of your work or you won't be able to price your property correctly, and therefore may not be able to sell it.
Okay, let's get to it.
You can appraise your own property without spending a lot of money and be reasonably confident of your results.
Call at least three local real estate offices and tell them you are considering selling your property.
Ask one of their agents to make a comparative market study of your property.
Tell them to include all the sales in your market area that compare to your home.
They will call you back later and want to set an appointment to deliver the information, tell you about their company and ask you to list your property with them.
When they do, let them make their presentation, then ask them to leave all the information on the property analysis and their company, so you can study it and make a decision.
After you have all of the information from all three companies, lay it out on a big table and create a work sheet of your own.
Using one line per property, list each of the sold properties with their selling price per square foot on the far right.
You don't need to worry about including the active listings that are up for sale, they are not relevant to your study in determining the value of your property.
Do hold on to the information as it will be important later in determining the price you wish to ask for your property, because these will be the properties you are competing with.
That is, competing for the buyers that are available in the current market who will be looking at other properties actively listed.
Now, add up the column on the right and divide the results by the number of properties on your list.
Multiply that result by the number of square feet in your home, and the result should be the current value of your property, within a percent or two.
That's all there is to it -- and if you have included all the properties on your list (not eliminated the low ones to make sure you like the results) you are ready to sell your property.
In this process you have also met three local realtors and have enough information to evaluate the realtors, should you decide to use one to help sell your property.
If you decide to try and sell it yourself, there are several internet resources that can help you find the legal forms that you need and creative ideas on how to sell quickly.
Good luck, I hope this helps.
The single most important factor in establishing value in Real Estate is knowing where a property is located, whether it is your home, a commercial property, rental property or raw land - it's where it is located.
That means in what market will be the major determining factor of a property's value.
With the headlines on CNN, newspapers and magazines screaming the news that real estate values have dropped 20-30%, and I have heard it said as much as 50%, it's important you have an understanding of your property's value.
For most people their home is the only major investment they have.
With interest rates now at a 35-year low you may want to consider refinancing, or your own financial situation (because of job loss or another financial down turn, such as the stock market) could mean you will be considering selling your home or other investment property, just to continue meeting expenses.
If that's the case, you must know its present value.
This article is for you.
I was really surprised at what I discovered last week while gathering year end figures for our business, part of which is to assign the value movement in real estate in our local area (50 mile radius).
As we computed the actual difference in the average residential selling price (not listings for sale, but sold and closed homes) between 2007 and 2008, it was only down a little over 2%!This was really surprising, because I've been reading the same news as you and was braced for grim figures.
I have friends in other geographic locations who are reporting that for the same period their drop was more than 23%.
So my point is, you need to know the value of your property in your market location! Appraisals can be expensive and some lenders may require a certified appraisal before loaning money on your property.
However, if you have some equity, you should be able to find a lender that will accept a recent tax evaluation, and if they perceive you have substantial equity in your property you may not need one at all.
Most lenders will allow you to put the cost of a new appraisal in the new loan, and you might find a lender who will waive it.
So when talking with lenders, be sure to ask about that.
Anyway, in today's "financial crisis" world you need to know where you stand, especially if you are thinking about selling.
In a market like this where buyers are able to pick from many properties and make the best deal, you will have to spend extra time preparing your property to sell.
If you do a little home work you can establish a value that should be within a few percentage points of what an appraisal would be.
Before you start to determine the realistic value of your real estate, consider this first.
It's difficult for us to accept change and we all resist it, sometimes even subconsciously.
It is possible, when working with statistical information, to pick and choose what data you use and consciously or subconsciously alter the results.
If you don't control the urge to do that, your results will be of no benefit to you whatsoever.
You must accept the results of your work or you won't be able to price your property correctly, and therefore may not be able to sell it.
Okay, let's get to it.
You can appraise your own property without spending a lot of money and be reasonably confident of your results.
Call at least three local real estate offices and tell them you are considering selling your property.
Ask one of their agents to make a comparative market study of your property.
Tell them to include all the sales in your market area that compare to your home.
They will call you back later and want to set an appointment to deliver the information, tell you about their company and ask you to list your property with them.
When they do, let them make their presentation, then ask them to leave all the information on the property analysis and their company, so you can study it and make a decision.
After you have all of the information from all three companies, lay it out on a big table and create a work sheet of your own.
Using one line per property, list each of the sold properties with their selling price per square foot on the far right.
You don't need to worry about including the active listings that are up for sale, they are not relevant to your study in determining the value of your property.
Do hold on to the information as it will be important later in determining the price you wish to ask for your property, because these will be the properties you are competing with.
That is, competing for the buyers that are available in the current market who will be looking at other properties actively listed.
Now, add up the column on the right and divide the results by the number of properties on your list.
Multiply that result by the number of square feet in your home, and the result should be the current value of your property, within a percent or two.
That's all there is to it -- and if you have included all the properties on your list (not eliminated the low ones to make sure you like the results) you are ready to sell your property.
In this process you have also met three local realtors and have enough information to evaluate the realtors, should you decide to use one to help sell your property.
If you decide to try and sell it yourself, there are several internet resources that can help you find the legal forms that you need and creative ideas on how to sell quickly.
Good luck, I hope this helps.
Source...