Determining your Home’s Worth in St. Louis, Missouri
If you are looking to put your home on the market in St. Louis, the first thing you have to do is determine its value. There are several ways in which you can do this. You can research the homes around your area to get a ballpark figure and you can speak with a professional realtor who will come and take a look at your home. There are several factors that affect the value of your home including:
• Age of the home
• Recent renovations
• Square footage
• Selling price of homes near yours
• Condition of the home
• Condition of nearby homes
• Number of Bedrooms
• Style of your house Vs the comparable properties
Each of these factors will have a significant bearing on your home’s value and you may be surprised to find out that your home is worth more – or less – than you expected.
Research it on Your Own
Even without intricate real estate knowledge, you can get a general idea on your home’s value by visiting websites such as Trulia.com or Zillow.com. They list the average selling and listing prices in your neighborhood and also estimate the value of your home. The main thing to consider with using these websites is that they rely on public records to create the listings and not all public records are accurate.
Visiting the websites, however, can at least give you an insight on what to expect.
Word of Caution
Do NOT use zillow’s ‘zestimate’ to determine your properties value. I have seen ‘zestimates’ before that were off by over 100K on a properties worth. The ‘zestimate’ is merely a computer algorithm and it has no way of measuring the condition of a home and then comparing that condition to the other sold properties.
Three Ways I Evaluate Property Value
The first way is that I take market data and measure appreciation and depreciation from when you bought the house to present day. This is a big picture way to evaluate properties, but is a good way to see what your area as a whole has done over the course of your ownership.
How this works is that we take houses that are within 5 miles of your property, that were bought within a year of when you bought your house AND have sold within the last year. We then calculate how much each property appreciates or depreciated and can use this data as a measuring stick to what your property is worth.
Of course if you dumped money into your house or ‘stole’ it and got a incredibly good deal when you bought it we have to make adjustments.
The second way is what I call the comparable method. I basically try and find the most like properties to yours that are as close as possible to your house. A ideal situation for this method is to have your next door neighbor’s house sell. The house sold yesterday, and is identical to your house in every way.
In this scenario, that one property is enough information to value your property. The problem with this scenario is that over the past 5 years of being in real estate, and having sold over 300 houses in my career, I have never actually had this happen.
Even if a house is very similar, the yard might be different, or one kitchen may be updated with granite will the other is original countertops. So typically you will need to take a small sampling of very similar properties and come up with the value that way.
The third way that I evaluate properties is by dollars per square foot. I will a macro sampling of sold properties in your area. I’m not as concerned with getting exact comparables to your house, but any outliers will be thrown out. For example, if you live in a ranch, I would generally throw out all non-ranch homes.
I then calculate the average dollars per square foot that homes have sold for in your area, which gives you yet another measuring stick for your house’s value. Depending on the condition and location of your home, you may be exactly average, you may be quite a bit below average or if your house is completely updated you may be able to fetch the high end of what your area’s houses sell for.
End of the Day – Contact a Professional
The best way to get an accurate idea of the overall value of your home is to speak with a professional realtor. A realtor can provide you with a Comparable Market Analysis – also known and referred to as a CMA. CMAs take into consideration many of the above factors and compare them with homes in your area that are similar in size, construction, amenities and location.
Word of caution
make sure you know that amount of experience your realtor has, and don’t confuse age for experience. I know many realtors that are twice my age that have not sold even a third of the homes that I already have in my career. Ask them how many houses have they sold in their career, AND how many houses did they sell last year.
Typically, while the CMA will reveal the details about similar homes in your area that are either up for sale or under contract, until they are sold, you cannot count a home as a comparable and should not use properties that are on the market as a measuring stick for how much your house is worth.
A professional agent will be able to help you evaluate all of the factors and make an educated decision as to what is best for you and your family.
Check out a couple of STL Real Estate LLC’s previous articles here!
Home Renovations That Actually Pay-Off
Long-Awaited ‘Qualified Mortgage Rule’ Released