Following home values, locally and nationally, occupies a lot of time for a lot of people. The Internet is a great resource for buyers, sellers and real estate brokers, as it allows us to locate current information about home prices. However, there’s a lot of erroneous data on the Web. It helps to have a real estate agent’s experience in interpreting it and deciding what’s of value and what isn’t.
In periods with high foreclosure inventories, there is a great deal of discussion of just what constitutes the true value if a home if it must compete with foreclosures. Value is not an exact science, though mathematics and good data gathering techniques can help us to estimate value. Strictly defined in home sales, it’s what a willing buyer and willing seller agree on as the selling price.
“Real estate is local.” We’ve all heard this many times, and it’s true. While there are national trends in home prices, every area has its own unique characteristics, and prices there will respond to those. Prices there may be influenced by national trends, but they’ll react as much or more to local influences. This was proved true in the aftermath of the real estate and mortgage crash beginning in 2007. Some areas suffered worse than others, and some areas recovered much more quickly than others.
Our job for both our buyer and seller clients is to have the knowledge, experience and resources to accurately estimate property values. It’s not an adversarial situation, as if we aren’t realistic with a seller about listing price, then buyers won’t respond with a purchase contract. It all balances out, but requires the right tools and experience to assess property value in the “current” marketplace.
Value isn’t usually tax valuation. It’s rarely what a homeowner will list their home for as a FSBO, For Sale By Owner. It’s not what you’ll see for commentary on large real estate sites that allow anyone to comment about homes for sale. Value must be realistic and take into a account a number of variables related to national trends, local job situations, amenities in neighborhoods, home features, and supply/demand pressures.
The experience and resources of a real estate agent become very important in determining value in today’s challenging real estate market.