The Unknowns in Home Valuation

The Unknowns in Home Valuation

Spica Real Estate’s licensed agents use their experience and expertise when putting value to a home. Narrowing down how much a home is worth to a potential buyer is a combination of science, art and a little bit of strategic luck. It is a dance requiring an agent to estimate what an appraiser will value the home at, what a buyer will be willing to pay and the seller’s desired net at the sale.

Realtors use the scientific tools and formulas available to find home value using area comps, SEV, replacement or assessed value and appreciation. Sometimes, there can be little data available or a home has unique elements that are often not easily quantifiable. The agent must then use a little bit of art in valuing the home by combining what is known, what has been heard about the neighborhood or area, what has been seen by buyers as valuable and work on narrowing down a home’s market value to a range. Sometimes even then, a home value ends up being a little bit of strategic luck.

Putting a home on the market with the understanding the pricing may not be spot on can be a hard position for sellers. However, taking the step of putting a home on the market can sometimes bring the best indication of correct home valuation. Realtors can use the art of analyzing buyer feedback and showing numbers to indicate a correct or possibly overpriced home. Not many showings in the first week or two? There is a good chance the home may be overpriced; but getting many showings can often shine a positive light on the pricing. In the end, a good seller brings to the table a positive and flexible attitude, and willingness to listen to the advice of the agent. A good agent is willing to listen and balance the needs of the client with what the science and the market is indicating for a home’s value.