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Guest column by Beth Moran–
It’s springtime in Citrus Heights and the birds are chirping, the flowers are blooming and you’re thinking: time to sell my home.
So, where do you go to figure out what your home is worth, especially in this seller’s market? Traditionally, the first step was to contact a real estate agent because they had the data on recent sales, but the internet has made that step much easier — it’s all at your fingertips, so you start by asking Google: “How much is my home worth?”
Up pop numerous websites offering to give you information on pricing, loans and current homes for sale. But — and there’s always a but — the results are subject to how accurate you input your information.
The follow-up phone call from the company headquarters, (not local) to get the specifics is amazingly quick. They reconfirm information, ask a few questions and go through their initial screening process.
You are assured they will do a market analysis and be in touch in a few days and then, of course, upon your approval will send a local real estate agent they’ve partnered with to come out to inspect and then make an offer to buy your home.
You didn’t want to give out your information, but we’ve grown so accustomed to doing so that it’s now second nature… welcome to real estate in the new millennium.
The question remains: how accurate is the price they’ve determined? That depends on which point of view you take when looking at the market information.
Real estate appraisers traditionally determine a home value from the perspective of the lending institution. Yes, the buyer typically pays for the appraisal, but the point of view of that appraiser is on behalf of the lender, who considers the value needed to justify making a loan.
The standard method includes utilizing recent sales, cost to rebuild, and the income capitalization. One of the more interesting aspects of valuing property has begun to arise with the advent of artificial intelligence (AI).
A recent article put out by RISMedia, a real estate industry website, details the immense amount of information available online to determine not only current but appreciated value. By collecting real-time data in conjunction with current social media data, sales data, demographic data and other neighborhood information, AI can offer predictions that local appraisers (and smart Realtors) have, but can do so from remote locations.
This is how your home value is calculated, but that isn’t the entire story.
After they do a home inspection (and the sales pitch), the offer is given with the promise that you can vacate as early as two weeks and leave the rest of the work to the new owner.
So, how do you determine if the offer is priced accurately, particularly when they compare your home with current sales? My advice is for potential sellers to always get three market analyses from local Realtors.
Depending of their level of expertise, they can show you what is currently selling, which can confirm or deny if the same homes were used in the market analysis used in the offer they presented.
These values can swing up or down by 6% on professional appraisals, depending on age, condition, upgrades, amenities and other factors. Knowing the current comparables will help you determine if your home is priced competitively on the offer, or if you’re leaving money on the table.
Beth Moran is a Citrus Heights resident and local Realtor/broker. She can be contacted at Beth@SacAgent.com.
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