Buying or Selling a Home/fair market value

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Question
Hello Kathryn,
What's the best and most accurate way to determine the fair market value for your house in specific years? Which websites should I use to help me? I've searched for MLS listings for homes similar to mine, and I see there's a wide range in both asking and selling prices. Realtors have valued my property at various prices. Thank you in advance for your reply.

Answer
Hi Shirley.

Thank you for your question, it's a good one! The quick, yet only semi-helpful, answer is -- the fair market value for your home is what another party is willing to pay for it. Of course, this could mean your home could be identical, right down to the upgraded baths and/or kitchen as a neighbor's that sold 3 weeks ago, yet you cannot locate a buyer to pay that same amount for yours now.

I do not know of, and seriously doubt one exists, a website that will give you the answer/s you may be seeking. It is common for homeowners to want to know what return on investment they can expect for bathroom additions, kitchen remodeling, a new roof, etc. There are sites that will give you their best guess on these. However, along with the nebulous fair market value, I need to underscore these are only medians, historical averages, etc. True 'value' comes in the offer process. It is then confirmed, or sometimes rebutted, in an appraisal.

The years on your home may or may not make a difference in the fair market value. There are other factors. Let's say your home was built in 1890 and your neighbors' homes were built in 1935, 1980 and 1993. However, your home has been rebuilt from the foundation up, with just the joists remaining and siding remaining in place. Yet the 1935 home has the original windows, 1980 has the original roof and the 1993 home has the original paint, carpets, etc. Each home will have it's pluses and minuses in the hearts and minds of potential buyers. This also includes the culture of the neighborhood and the area. A home built in 1890 may be frowned upon or coveted without regard to condition...Unless there is a huge difference in the age of your home vs. others in your area, and that is the ONLY criteria, that variance should not be a major factor in it's fair market value.

Bottom-line, depending on -why- you need to know will help you determine where to seek assistance on determining value. If you're considering selling, ask several agents to give you their quotes. If you're  refinancing, your lender will assist in determining value. If you're thinking about leasing to own to a private party, or selling your home outside of the MLS parameters, you will want to agree with your buyer on what appraiser you will higher to determine value.

As you had mentioned, Realtors have given you various prices. Depending on the unique qualities of your home, as in a custom home, specific view, or location, these prices shouldn't vary by more than about 2%, depending on your area.

If your home is truly unique -- one technique Realtors use is to have a 'brokers open'. This is when your Realtor invites other trusted Realtors into your home for them to provide their opinion on fair market value. Basically, what do they think their buyers would be willing to pay?

I sincerely hope this has answered your question thoroughly. If not, please do not hesitate to let me know.

My best,
Kathryn

P.S. Sites like Zillow and Trulia work on algorithms. NO ONE from these companies have stepped into your home or your neighbors'. Take their numbers with a grain of salt.  

Buying or Selling a Home

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Kathryn Hisert; Realtor

Expertise

Everyone deserves an answer! My rounded background will provide you with information beyond ‘just’ buying and selling. I can answer questions regarding short sales, foreclosures, deed-in-lieu, home staging, vintage home related concerns, most mortgage related questions, and divorcing couples’ housing options. I am a research oriented individual who strongly believes in connecting all the dots and providing as much, or as little, information and communication my clients want or need. My expertise is in San Diego and Santa Clara Counties.

Experience

After 25+ years in the Financial industry, Sales and Marketing, I came to the real estate industry as a mortgage loan agent. From 2002 to 2010 I was my clients' Realtor and loan agent. Since 06/10 I have been strictly a Realtor.

Organizations
N. San Diego County Assoc. of Realtors California Assoc. of Realtors National Association of Realtors

Education/Credentials
CDPE (Certified Distressed Property Expert) CREDS (Certified Real Estate Divorce Specialist)

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