General Question

sleepdoc's avatar

How to determine the market value of a home?

Asked by sleepdoc (4666 points ) February 7th, 2011

We will likely be moving in the next year and have started the real estate quest. We have come across a few homes that seem to be priced very high. Obviously when you look around the neighborhood, that can give you an idea of what property and homes values are. Short of having an appraisal done, are there other ways to really guesstimate the current market value of a home?

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28 Answers

Adirondackwannabe's avatar

Don’t look at the asking prices. Look at the selling prices.

janbb's avatar

www.zillow.com will show you what comparable homes in the same neighborhood have sold for recently. Make sure you are looking at recent sales only though..

sleepdoc's avatar

@janbb Thanks for the nod to zillow. I have been using it for a while now. The problem I am having in one of the neighborhoods, is that I believe many of the zillow prices listed are the price for the lots and have not yet taken into account the now existing structure on them. It makes using it a bit problematic in those areas.

@Adirondackwannabe… thanks for the advice. I had already gathered that was the best approach, but as I said above. It is hard to figure out what is what when you have lots that are near the price of lots with and existing structure and then some of the prices for what has been sold look to be a lot price, but I can’t verify that. Maybe I will just have to get a realtor to run me a comp sheet for the neighbodhood.

Adirondackwannabe's avatar

@sleepdoc Do you know how to go to the County seat and go through the public records? All deeds are recorded in the public records so you can go to what’s called the County Clerk here in NY, and see all the real estate that has been transfered. Find out what the deed stamp rate is in your state and you can figure the price of any real estate. The records are all computerized for the most part. The deeds also describe the real estate so you can locate it.

sleepdoc's avatar

@Adirondackwannabe… As far as I know here is Texas the only thing which would be available is the tax information. I will have to investigate that further.

funkdaddy's avatar

Of course a real estate agent could help you as well with their experience but it sounds like you may be avoiding that route either because of the costs or possible bias.

The other thing worth noting is that almost all houses right now are priced above what the seller expects to get. It’s a common strategy to build value with that initial price (which would still be under common “ceilings” people would set, like 200k, 250k, etc) and then just expect people to haggle. Just like a used car.

Since each house is a unique situation with variables both on the property and off, it really seems come down to “feel” as to what any individual property is worth and what the seller will accept. You can either pay someone to borrow their instincts or develop them yourself, especially if you’re targeting a specific neighborhood it doesn’t have to take that long.

Adirondackwannabe's avatar

@sleepdoc Texas operates under the Uniform Commercial Code, so all the public records should be available. It’s just finding where they’re kept and you should be able to look them up.

funkdaddy's avatar

FWIW, I believe that’s what Zillow builds their information off of as well.

JLeslie's avatar

The really good county tax appraisers sites have searches for recent sales in your neighborhood. Then you will catch all sales including those sold by owner. Also, realtors can easily give you sales in the area of those listed on the MLS. If you interview a couple to sell your house they should come prepared with the comps in the area: recent sales and what is currently on the market.

Cruiser's avatar

Call a Realtor, they will have all the information you need to get an idea. Look at the homes for sale and look at how long they have been on the market. Market time will tell you if the price is too high or not. Here in Chicago the home prices are still falling. Prices are moving at around 25% off of where they were 1–2 years ago.

JLeslie's avatar

@sleepdoc What county are you in? I’ll find the website for you.

sleepdoc's avatar

@JLeslie I am looking in Tarrant county Texas

@Cruiser Unfortunately, market time is not the sole predictor of whether the price is accurate. In this area the average time on the market for a home to sell is around 140 days. Even without a price adjustment.

choreplay's avatar

First of all research is different if you trying to sell rather than researching something you want to buy.

If looking for a price to sell:
I am capable and qualified to do appraisals but when I’m selling its all about the competition, therefore I don’t consider closed sales as meaningful (maybe if they occured in prior 20 days), but even than when that domino has fallen it depends whats still on the market competing with yours. One method is to drive around as if you were buying and pick up all the realty briefs, break them down on a price per square foot (beware of basements and partially finished areas), important thing is to compare apples to apples.

If your looking to research price to purchase at.
Lots of good advice above but some not so great. Zillow mostly list tax appraised values and those are very very very unreliable depending on the municipality. If you involve a realtor, yes there are huge bias’ and subversive motivations there. Most tax assessers have their info online these days, so don’t need to hike down to the courthouse anymore unless you live in the sticks. Know this about the market, it is very fragmented right now. Some of the latest stats say ⅓ of the sales are of foreclosures, ⅓ are motivated sales and ⅓ are regular transactions. Therefore when you do research know what your looking at, try to interview the realtor on those comps without getting hooked by them or trying to get ahold of someone that knows about the transaction.

The thing your saying about figuring out lot prices from home prices, that makes researching in those neighborhoods a pain. If you get the tax cards for these properties you can figure that out as they breakdown the tax appraised value for the land and buildings.

Texas ouch, as far as I know they don’t have to report sold price on deed but as has been suggested you can figure out the sales price by backing into it, use the tax paid (as per stamp on deed) and divide it by the tax rate.

sleepdoc's avatar

@Season_of_Fall ... thanks for the info… one good thing about most of Texas .. there are nor basements.

JLeslie's avatar

@sleepdoc This might be it, tell me if it works. It is not the county site though, it was a link from the county site, because the county did not seem to have a useful search engine, which is annoying. Here is the county website for reference.

robmandu's avatar

@sleepdoc, the Tarrant County Appraisal District web site will allow you to search the taxable property value of addresses you’re interested in.

In Texas, the rule is that the tax value should equal the actual market value. But that’s not necessarily guaranteed. There’s a lot of variability. For one, the taxable amount is not allowed to increase more than 20% over 3 years… during the housing boom, this meant a lot of real property values outstripped what the tax man could keep up with.

In any case, whether you’re a realtor or a tax appraiser or a home appraiser, one thing they all do is look at “comparable” homes in nearby neighborhoods to ascertain the value of your home.

If those other homes are poor representations though, then your home might be appraised too high or too low. For the best appraisal, someone needs to physically walk through your property and see the condition of your home and the quality of improvements you’ve made. That typically costs money to accomplish, though.

JLeslie's avatar

@sleepdoc Just to comment a little on what @Season_of_Fall most recent sales matter a lot. Appraisers use recent sales, and if you will be getting a mortgage, the house will have to appraise to get approved. Most buyers look at recent sales as a guide. And, then have to evaluate what is currently on the market. Sellers generally need to accept the market value of their house, even if they are asking a higher price.

choreplay's avatar

Buyers can have a loophole in the contract that if appraisal comes in significantly lower the price can be renogotiated.

On tax appraisals, right now a lot of counties have inflated appraisals because they resisted lowering the appraisals with the market. They did this by rejecting any sales that sold lower than previous prices on the same properties, citing them as motivated sales, but not all were.

choreplay's avatar

@JLeslie, you seem to be doing that type of search a lot. Thought you might like this link. http://www.realmarketing.com/

Cruiser's avatar

@sleepdoc I agree and disagree….if it is sitting a long time on the market it is not priced to sell period!

choreplay's avatar

I agree with @Cruiser, if it sits on the market a long time the mark has been missed or marketing was not done wide enough or directed at the correct target market. The price range your talk about (discerned that by you comments of lots price vs improved prices) is still pretty soft because of constraints in lending and conitued competition for foreclosed properties.

@sleepdoc, maybe I missed it but have you said the value question was for selling or buying. Seems to lean toward buying and that would help me tailor advice better.

sleepdoc's avatar

@Cruiser you maybe right. But when homes are on the market an average of 140 days and sell without having a price change it makes it pretty hard to know what is really going on.

Cruiser's avatar

@sleepdoc Again a Realtor will know all of what you seek and should be more than willing to share information with a prospective client.

Cruiser's avatar

@Season_of_Fall I agree with what you said as the lending process is difficult at best and Fannie Mae has all sorts of new ratios that shoot down many of the mortgages that would have been a cinch 3 years ago. 4 times the amount of paper work and scrutiny. Big problem is many people are underwater and have little or no equity and are stuck where they are. My house as it is I sold for $13,000 less that what I bought it for 8 years ago. At least I still have equity left but almost $90,000 less thanks to this recession.

choreplay's avatar

I took a $30,000 loss after I got sick of holding a former residence. Thought I could rent it and hold out. Rent was covering only ⅔ of the expenses. I brought a realtor in that was to represent me, but after he also brought a buyer to the table he became a facilitator. Turns out the buyer was a buddy of his and turns out that buddy knew just was to offer me so I would come out a couple hundred bucks ahead, after mortgage and paying the realtor. My resolve was beaten down and I washed my hands of it and let it happen.

sleepdoc's avatar

Well we are selling but are already working with a realtor on that and will hope for the best in that regard. We really tried to price fair there and look at what things are selling for. Many of places we are trying to look to buy seem to have homes that are over priced. I am just trying to figure out what the real market value is for those homes. I am thinking that my best bet is just going to be to get the realtor to run the sold comps info for me and work from there.

choreplay's avatar

Make sure that realtor stays as your representative through the process. Make sure you look outside the community for comparables. Sometimes individual communities make the market for themselves, sometimes legitimate and sometimes proped up.

@sleepdoc, another option is to hire an appraiser to provide comparables to you and that way you stay clear of knowing whether a realtor is acting honorably or motivated by something you don’t see. Know this though, appraisers will choke if you ask for comps for a specific property, thats technically an appraisal. Ask them about a certain size house in a certain area and get them to find sales that meet your parameters (dont call them comps). Keeps them out of the sticky situation of implying a value on a specific property. You would have to pay for this anywhere from $100 to $300, or if you found a realtor you really trust you could get the same quality research for free.

JLeslie's avatar

@Season_of_Fall Thanks for the link. I would not say I do it often, I just tend to answer these questions since I was a realtor, still have my license.

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