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Determining Real Estate Market Value

Monday, November 14, 2005 posted by Tommi Crow

The internet is a fantastic tool for home buyers. Instead of personally touring house after house, you can preview hundreds of listings from the comfort of your home. Unfortunately, the internet is not helpful in determining what you should pay, once you find your dream home.

While there are some “what’s the value of this home?” websites, they provide only sketchy and sometimes misleading information about home sales. Most of these “free home valuation” sites are nothing more than lead generation tools for real estate agent’s, mortgage and title companies, movers, etc. Their purpose is not in providing accurate information, but to tease you into providing your personal information, which in turn they sell to their subscribers.

The best way to determine the fair market value of a listing is a strictly non-tech method called previewing properties. Previewing is time consuming, but it is highly productive. It is almost impossible to determine what to offer for a home without knowing the local market for yourself. Plan to look at every listing that might work for you. Hitting Sunday Open Houses is the quickest way to see a lot of homes in a short amount of time. Take flyers out of InfoTubes and from homesellers. Start a file of all houses you have seen for yourself. Throw out flyers from listings you didn’t like. It won’t be very long before you clearly see the correlation between size, type, location and asking price.

Conclusion: The internet home valuation websites do not paint a whole or accurate picture of what a home is worth, whether you are a buyer or a seller. Text based comparable sales data misses many important factors such as floorplan, natural lighting, views, condition of the home and adjacent homes.

Avoid a large costly mistake before you make an offer to purchase a home. Experience the market with your own two eyes…wide open!