Some of the nationally based real estate companies provide consumers with a automated home valuation tool (AVM) which gives them an instantaneous estimated value for a home. This predictive model can be interesting to use and many times will give the owner a “warm fuzzy” feeling about the home’s potential worth – regardless of whether the home would sell for that price in the open market. You see this home valuation tools have no way of factoring in improvements that may or may not have been done on the home or of the other homes it is being compared to. BanCorp Realty customizes Comparative Market Analysis’ (CMA’s) for each client we represent.
The best home valuation tools provide a starting point for understanding the value of your home. Assuming the estimated dollar value they provide will be your home's sale price omits the most critical factor in your home sale-what buyers think your home is worth. In every case automated home valuations are produced by a computer program that uses a variety of ever-changing data to derive the potential value of your home. The two primary pieces of data these programs use are
The sale prices of homes that have sold near your home.
The sale prices of homes that are comparable to yours (e.g. similar number of bedrooms, baths, square footage).
While this information helps understand what a home could sell for, there are numerous other factors which always influence a home's sale price that a home valuation tool isn't likely to know.
The condition of your home: if your home has a garage door that needs to be replaced, it is broken and out dated and needs to be completed replaced, then the sale price might be lower than that buyers paid for other nearby or comparable homes. On the other hand, a new roof, new appliances, and a well-kept yard might allow you to get more for your home than others might have received in the past.
Where your home is located-if your home is on a busy street with lots of traffic, the price you are offered might be less than other homes sold for that were nearby that enjoyed no ground traffic.
What is important to a given buyer-home valuation tools never know what potential buyers want. Any given buyer may find your home to be of more or less value based on what they want, not on what a computer guesses they'll want. Another reason to be cautious about home valuation tool results is that BanCorp’s Realtor’s are wary of them, and frequently we have to educate sellers to set realistic expectations about their home's likely sale price.
A Bancorp real estate professional is paid a commission for the sale of your home based on its sale price. It is in our best interest to help you sell your home for the highest price possible. That's because it's our job to help you maximize the return on your home's sale. A result of getting you the highest possible sale price is that we’ll will earn a higher commission.
The important thing to remember is that home valuations are computer-generated estimates of what your home might sell for, not what it will sell for. Each homebuyer has unique preferences and needs, these estimates cannot include all of the factors that they may consider when determining how much to offer you for your home.
Home valuation tools are fun to use, provide other information that a seller or buyer may find useful, and get people interested in performing a real estate transaction. However, to get an accurate analysis of your specific home's worth in the current market you'll need to obtain a Comparative Market Analysis (CMA) from a licensed, professional BanCorp Realtor.