February 4, 2009

Today’s Real Estate

Seek accurate home-value comparisons

By Donna Nardi
Special to the Times

Today’s homebuyers have more data at their fingertips than ever before. Vast amounts of information are available to us from every side.

While convenient, such information requires a keen mind to discern what is accurate. Having such information can make many people believe they can be their own Realtor, and save a great deal of money. But, it’s important to discern whether this information is accurate.

There are widely used Web sites offering important data. It can be fun to see how your home’s value compares to your neighbor’s. For general comparisons, it’s great. But understand that the data is generated by mathematical processes; it’s pulled from public records.

When using the information from these sites to price your home for sale, some critical information is missing. For an accurate comparison, the data must include the home’s age and improvements, local schools and other info. For instance, a home in a senior development may be a lower price, while a block away the homes have a straight value. The lower-priced senior homes mathematically bring the value down throughout the neighborhood.

In some older neighborhoods, such as Willow Glen, many homes are in their original state, while others have been completely rebuilt. Also understand the data is pulled from public records, including private sales, such as between family members. Usually, these private sales are priced lower, bringing values down, and don’t reflect true market values. A mathematical comparison would be utterly inaccurate.

There are many reasons besides selling your home that someone might need a true value. Refinancing is one reason, or deciding whether or not to sell your home could be another. There’s no harm in getting a good idea of your home’s value by going to these sites, but don’t depend upon their accuracy.

The most accurate method to get the true value of your home is to get a Comparative Market Analysis (CMA) from a seasoned Realtor – even better, one that’s familiar with your neighborhood. They will carefully review the details of your home – size, age, improvements, features, lot size, updates, condition and the neighborhood. They then look at recently sold homes as well as active listings.

Keep in mind, an active listing, while not an actual value yet, can be a consideration. The agent will carefully compare this data with other homes in your area, look at the uniqueness of your home’s location and compare it to others. Often, the agent may have been inside a number of homes in your neighborhood and have better information for comparison. The actual location is also critical. Maybe one home backs up to a busy street and yours has a larger yard and backs up to the foothills. These features can make a huge difference when pricing a home correctly.

Pricing your home correctly is a serious matter. If it’s priced too high or too low, the best audience is missed. The first three weeks of a home on the market is critical – it gets more attention and viewings during that time. Afterwards, the listing can be considered stale, causing you to seek other ways to attract buyers. So, it’s best to price it right from the beginning to attract the right buyers to your home.

Often, a seller will determine the asking price of their home by determining what they need; the loan payoff, paying off other debt, costs for repairs or moving costs to the new home. No matter what a seller needs, this is not a good method for determining a home’s price. In the big scheme of things, the buyer determines the actual value of the home, as they are ready and willing to pay a specific price for it. Once the home is purchased and closes escrow, that price will be used as data to determine the value of homes in that neighborhood. And the cycle continues.

So, although enjoying these sites can be fun, when it comes to serious matters, get the experts to determine actual value. Your financial future can certainly be affected by this accuracy.

Donna Nardi is a Realtor, Accredited Staging Professional, and Senior Real Estate Specialist with Prudential California Realty in Willow Glen. You may reach her at (408) 918-4410, or donna.nardi@prurealty.com, or www.HappyWayHome.com.