Vail Ask a Realtor column: How do I determine the value of my home?
Ask a Realtor
I live in Illinois and have a second home here that I am considering selling and upgrading to a larger second home in the near future. I am very curious as to the value of my Vail home right now. I am hearing, in my home state, that there is a class-action suit brewing against “estimates” made by a large real estate internet information service that I had been using to base my best guess on the value of my property.
Do you know anything about this? Are their “estimates” of any value? Do I need to pay for a full appraisal to determine what I can sell for? Looking for some direction so I can get the most money possible.
Dear Value Seeker,
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You have come on a very important question about how to determine value when selling your home. To answer your question about the pending lawsuit, it is my understanding that it is about the “estimates” being considered as appraisals, but in fact, the plaintiffs say the “estimates” are simply based on computer algorithms, rather than actually viewing the property and using valuation calculations that a qualified appraiser would use.
The plaintiffs seem to be saying that they feel that errors in the internet information company’s “estimates” hurt neighborhood and individual sales if their valuation is way low and/or confuse sellers if they are inflated. I would like to give you some facts on which to base a good decision.
The data on many internet information sites is often sadly outdated and, therefore, inaccurate. In my experience, value determined solely by computer can often be very different from where we see the market. Appraisers do a lot of work to determine the value of properties, especially if there are no close comparable sales. If they have good comparables, then they are properties that have sold in the past six months, which tells you where the market has been, not necessarily where it is going.
Appraisers often confer with real estate agents if they need more knowledgeable consultation to help determine a value. Real estate agents are not allowed to do appraisals, but we are allowed to give you a comparative market analysis and/or broker opinion of value, if you are thinking of selling your home, at no cost.
Real estate agents have access to research the multiple-listing service for sold, under contract and active properties, so they have the ability to see trends. They often know the neighborhoods and what is in demand and what is going to sell quickly, or take longer to sell, just because of condition, unpopular floor plans and of course, location. Real estate agents are also well aware of upward trends that often are not yet reflected in closed sales.
Lastly, appraisals for lenders must be done by an appraiser chosen by the lender and are usually used as a confirmation that the home is worth the contract sales price. So an appraisal you pay for most likely could not be used by the buyer of your property. Therefore, a good starting point is to call a knowledgeable real estate agent as soon as possible and learn more about the market and what they think you could sell your property for in today’s market to maximize your net proceeds at closing. You have nothing to lose.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.skiandteehomes.com.