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What is a Home Evaluation…

Posted by Christina Steinmann Lowry on February 14, 2022
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And why is it important?

A Home evaluation is the process that we take use to determine the value of a home. It is the approximate amount that a home can sell for in the current market.

How we evaluate a home

We use our understanding of the current state of the market to check how much a home could sell for. Have homes been selling quickly? Are they selling over list price? Are they priced competitively to sell over list price?

home buying

Then, we look through the recent sales that are as like the subject property as we can find. This is easy, when the house is in a subdivision and an almost identical house has sold recently. Sometimes it more difficult, if the house is out of the city or a more unique property. In both cases, we review the features of the the house we are evaluating and the comparables.

Things like a double garage compared to a single, distance from the city, yard size all play a role in the value of a home. Other updates like new windows, roof and furnace also impact how appealing the home is to buyers. Refreshed bathrooms and kitchens also impact the pricing.

If there aren’t any recently sold similar houses

If there aren’t comparable sales from the last 60 days, then we look back at the last six months to a year. We review the rate the market has increased in that time span and calculate the potential sale price. This percentage can be a very good indicator of sale price if the homes are very similar. When we look for comparable sales that far back, we take a look at the updates and differences too.

kitchen in your home

It is also important to check what similar homes are currently for sale. These homes are the competition and its important to know their price. This will help us choose a listing price to best market the subject property.

List price and evaluation price are two different things. Evaluation price is the value of the home: what it is expected to sell for. Listing price is a marketing strategy. It’s used to attract the most buyers to view the home and help them see the value in it.

Why this is important

We do this evaluation research to ensure that the home is not overpriced. Overpricing a home can reduce competition, and we don’t want to do that. Pricing a home correctly helps it sell quickly. It increases the potential competition. It also helps us determine an effective marketing plan and what to price the house at to get the most exposure. It is important to understand what is happening in the real estate market to give an accurate home evaluation.

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