Aloha & Good Morning!
Maui is getting lots of rain right now, stay safe out there.
Let’s talk about home pricing. In February there was an interview on a morning talk show with the Chief Executive Officer of Zillow. This interview set of a storm of blogs and articles that center around the popular Zestimate that is used on Zillow to give an estimate of a home’s value.
One of the biggest issues with a Zestimate is that it is an automated number that really is just a “starting point” to a home’s value. Often times the Zestimate is way off and only rarely does a home’s value match up to the Zestimate. It is a difficult tool to use because both buyers and sellers will often look at the Zestimate of a home before even talking with a realtor and then decide the home is not worth the cost because of that. Or even worst is when we get started on a home offer and one side or the other use a Zestimate as a reason to pull out of a possible home sale.
So what is a buyer or seller to do to get an accurate idea of a home’s value? I can say for certain that the best way to get a home’s value is to speak with a realtor. We have many tools that we use to help determine a home’s value including a Comparative Market Analysis (CMA). We also will work with a home appraisal to get an accurate value. The article below does an excellent job at explaining what a CMA is and what an appraisal is.
- How do you find out the value of your home? There are two ways - a comparative market analysis, or CMA, and a professional appraisal.
- The CMA is used to determine current market value so that you can choose the listing price where your home will sell quickly and for the highest amount possible.
- Your real estate professional gets the information for the CMA from the multiple listing service, or MLS, where brokers and their agents pool information on listed properties for sale. The MLS also contains sold data, historical trends and property tax roll data.
- The CMA includes recently sold homes and homes for sale in your immediate neighborhood that are most similar to your home in appearance, features, and general price range.
- Where the bank appraisal differs from a CMA is that it is performed by a licensed appraiser - not a real estate agent. Even though the appraiser is hired by the bank, the appraiser has no vested interest in the transaction.
- The appraisal is designed to protect the bank, so that it doesn't loan too much money for a single property.
- The appraiser visits your home and compares it to other similar homes using square footage, finishes, age, condition, location, and more.
If you are interested in the value of a home you want to sell or a home you want to buy please contact me today. I’m more than happy to get you an accurate idea of a home’s value so you can determine how to move forward.
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