If you are getting ready to sell or buy a new home, then you might be wondering just how and where real estate agents figure out how much a property is worth. They don’t come up with the number from out of thin air, naturally. In fact, quite a few different factors will ultimately determine just how much a home is worth. Depending on the type of property and the location of the home, a number of things can cause the value of the property to be higher or lower than you might expect. Let’s look at some of the things that the agent will use when trying to come up with an accurate value for pricing a home.
Look to the Past
One of the first things the agents will do is look at the prices of homes in the area, as well as the price of homes that recently sold in the area. They will usually look at the sales prices of comparable homes – same area, same size, etc. – to get an idea of what ballpark your property might fall into in terms of price. They will look at the age of the home and the amenities it offers, as well, since all of these factors can make the price change.
Look to the Surroundings
What is the neighborhood like? Even a great looking and modern home will have a hard time selling if the neighborhood is horrible. The area should have a good feel and be safe.
Homeowners will also have input on how they want to value the home. This can be a good or a bad thing. Many homeowners have emotional attachments to their property, and for those people, this can color their perception of value. They will try to price the property too high, and this can make it very difficult to sell. The agent wants to make money off the sale of the home, but they know where to put the home’s value realistically, and it is generally a good idea for sellers to listen to the agents in this regard.
Other elements to consider include the school district. The nearness of emergency services and the major roadways and businesses are important factors, as well.
Look to the Economy
If you are selling a piece of property in a buyer’s market, then the chances of getting a good price go down a bit. It means that more and more people are selling their homes so buyers have more of a choice, and they don’t have to jump on your property since so many others are available. They tend to have more power in these negotiations.
Also, if the economy is weak, it typically means people have less money to spend and they are less interested in buying new properties.
The above are some of the most important factors that an agent will consider when he or she is trying to determine the actual value of a home. When you are getting ready to sell, or buy, you can speak with the agent about just what their process is for figuring out the value.