With the market being so crazy right now, and prices all over the place, it is only natural to wonder about the value of your home, especially if you thinking about selling. Intuition is more than likely telling you that there has been some kind of shift in value in the recent past. Intuition also tells you that if you need to get an accurate assessment, then a solid appraiser will be able to help you evaluate your investment. However, as counterintuitive as it may seems, most folks don’t need to get an appraisal if they are considering marketing their home. Here’s why.
The Athens Regional Area has its share of unique properties (and people!), but most of us live in areas where the properties immediately around us will become the homes used to determine the value of our own. These “comps” are easy to source through a realtor, whose job it is to know the market, have access to raw data, and establish an accurate value. This is a service associated with our overall service of getting your investment sold. A good agent knows the market, and in fairly homogenous neighborhoods, establishing value is something we do every day, and unlike an appraisal, we do it at no additional charge to you.
The Athens Area has hundreds of subdivisions. If I get a call from a prospective client in a living situation such as this, I ask all sorts of questions, take notes, visit the property to establish a strong understanding of the “product” to be marketed, and then I crunch numbers.
I look at recent sales, and I look at sales trends in the neighborhood. Is the neighborhood trending up, down, staying stable? I look at price per square foot and see how far the prices hold before they start to flatten out for homes with more square footage. Ultimately I want to focus in on a more select group of comparable homes to really establish which homes within the neighborhood truly compare to my “subject” property.
I then will use a list of specifics about the subject property as points of comparison to establish value. A good agent is often already familiar with the comps because these comps were recent sales, and we watch properties and know the products on market. Often we’ve actually shown or pre-viewed the property back when it was on the market. This kind of experience is invaluable. The whole process is fairly involved (and fun…for a geek like me, anyway).
A Note of Caution
In a rapidly evolving market, like the one we are currently experiencing, it is critical that the comps are as recent as possible since inaccurate valuation can lead to all kinds of headaches and possible financial loss. A good agent will be aware of this and go back in increments (3 months, 6 months, a year, 18 months, etc.) to establish if/when the market shifted in your immediate area. We will also know the market well enough to assess if the shift is merely a discount in a strong area that will likely rebound because the neighborhood story is still sound. This is important because if you are not in a rush to sell, you can wait the market out. And if you are in a rush to sell, then you will need to consider the relative loss you will be looking at. Imagine, though, that the analysis is faulty and you think you are waiting the market out only to find that the area is actually trending down! This is where strong agents earns their money. We know the area, and that intimate knowledge is critical.
When Should I Consider Getting an Appraisal?
When you can’t look out your window (or close to it) and see your comps. When you own a 10,000 square foot, turn-of-the-century barn that has been converted into a gallery-like luxury living space on ten acres right on the Clarke/Oconee County line.
When you are trying to sell your unique log cabin/horse farm on a 14 acre tract but you are only selling five acres with the property, and the home was designed to accommodate your family heirloom furniture and over-sized sculpture collection while little but little consideration was given to resale.
Back to intuition. If you live in a unique setting, you will know when you need an appraisal. If you live in a subdivision or an area of town with similar homes, and you consider your new chef’s kitchen to be the unique aspect that warrants an appraisal, hold off and talk to a realtor. The money you spend on an appraisal can be put to good use elsewhere. But make sure you work with an agent who does a professional analysis for you. If an realtor rolls in, armed with what’s in his/her head, he/she is being a little too cavalier. Agents shouldn’t be made to show you solid numbers to back up a bottom line; they should come with those numbers tucked under an arm.
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