Internet sites like Zillow, Redfin, Trulia and Realtor.com are good places to start. However, if you are relying on these sources alone to get an accurate home value don’t be surprised if your home sits on the market, if each open house you hold doesn’t attract at least 20 prospective buyers and if you don’t sell for top dollar. The estimated home value these websites provide are based on the three most basic defining features of your home : the city it’s located in, the living square footage of your home and the price per square foot of recently sold homes in your city. Put yourself back in your shoes when you purchased your home and ask yourself this : was price per square foot and city the only two factors affecting your decision to buy? If your answer is yes then you’re every realtor’s dream buyer to work with; conversely, if you answered no then you’re every realtor’s dream seller to work with. Either way, it makes you a dream to work with so call me and let’s talk about your real estate needs.

Here are 3 important factors you must consider when determining your home’s value, a list of difference makers that will set you apart in the marketplace and a strategic pro tip that could help you get a higher price for your home than it’s actually worth.

Be specific with your search criteria so that you are comparing apples to apples. Consider these 3 criteria before anything else.

  • PROXIMITY Comparing homes in the same city is not good enough. Distinguish between your home’s city and your home’s neighborhood. Within once city there can be several school zones, multiple zip codes and vastly different architecture. It’s important to limit your search to homes in the same pocket or neighborhood. When I’m working with a motivated client who wants to sell high and doesn’t want their home to sit on the market – experienced sellers know that  the first 3 weeks on the market are the most important for attracting motivated buyers willing to pay top dollar – they expect me to be accurate with their home’s value. Therefore, when I’m calculating their home’s value I start by setting a one mile radius around their home. Then I further filter the results by removing homes that are on the opposite side of main streets (e.g., in the San Fernando Valley home’s south of Ventura Blvd carry a different prestige than homes north of Ventura Blvd) and homes that fall in a different zip code. Homes in the same neighborhood generally have more things in common, such as similar building characteristics like interior layout and lot size.
  • PROPERTY TYPE, SIZE & TIME After distinguishing a home’s neighborhood, I immediately identify the property type  (single family residence/SFR, condo or townhome). Then pull data based on market activity in that neighborhood and for that property type by identifying all the homes that are currently listed, all the homes that are in escrow and all the homes that have sold within the last 180 days (180 days is a standard time frame used in the industry to define recent sales). Once you have pulled all the sales data in your neighborhood relating to your property type you must filter this data by searching for homes that are a similar size as yours.

 One of my listings in Woodland Hills, CA serves as a perfect example. Woodland Hills, CA is a city in the San Fernando Valley containing SFR’s, condos and townhomes. My listing is a SFR but within Woodland Hills there are over 20,000 single family homes that fall in two different zip codes. Also, the home I listed was originally built in 1960 as a 2,276 sq ft home. In 2008, my clients added 2000 sq ft and a 2nd story to the house, significantly changing the property’s profile (now a 4300 sq ft home). Most homeowners in their neighborhood have not made 2000 square feet additions, therefore, most homes are smaller in size. Would it make sense to compare a 2300 sq ft home with 3bd/2ba to a 4300 sq ft home with 6bd/5.5ba? 

Compare your home to properties similarly sized by adjusting your search criteria to include homes that fall within a range of +/- 15% of your home’s living square footage. This will do two helpful things for you, narrow down the number of comparable homes to analyze and give you a more accurate sense of of the market value of similarly sized homes in your neighborhood.

  • FEATURES Now that you have narrowed down your search to include similarly sized homes in your specific neighborhood it’s time to consider the improvements and features that make your home unique. In this step you make your price adjustments by analyzing the specific features and improvements of your home compared to those that are similarly sized in your neighborhood. On the most basic level, a half bathroom carries less value than a full bathroom; a home without a pool is less valuable than a home with a pool; a home that sits on a 7,500 sq ft lot will be valued different than a home that sits on a 15,000 sq ft lot. Now let’s take it one step further. When comparing two full bathrooms of the same size, the bathroom that has more modern improvements to their vanity, flooring and shower will carry more value; a pool that been recently replastered will carry more value than a pool of similar size that is empty; a lot that is 15,000 sq ft of flat land will typically carry more value than a lot that is 15,000 sq ft but has only 10,000 sq ft of flat land and 5,000 sq ft dedicated to unusable hill side. Making the right price adjustments are essential. This is why working with a local real estate expert who has access to all the market data is pivotal for motivated sellers.

 

DIFFERENCE MAKERS There are extraneous factors that can’t be modified by homeowners that often impact a home’s value either positively or negatively. Factors that typically raise your home’s value include being in close proximity to new developments that are selling higher than your neighborhoods median sales price; having multiple structures or an ADU on your lot; the specific direction your home faces will attract or detract different types of buyers, for example, one buyer may not like the direction a specific home faces because they believe in feng shui while another buyer would love the direction that same house faces because of the 180 degree views it provides. Exposure to a lot of noise or traffic will typically decrease your home’s value, e.g., living on a main street, being close to an air port/train tracks or being across from a school. With that said, there may be that one buyer who will pay top dollar for a home right across the street from a school even though cars will be lined up in front of their driveway during drop off and pick up hours because they will be unaffected by the traffic since they leave for work and arrive home at odd hours and they want their child to be able to walk to and from school. Similarly, a house with a city wash behind it is typically seen as a negative when it comes to a home’s value but there may be that one buyer who prefers the wash being there over having another neighbor. In this industry there is a general rule of thumb on how to adjust for each difference maker when it comes to determining a home’s value, yet that general rule of thumb applies to the typical buyer who behaves like, thinks like and represents 70% of all buyers. Across sales in all industries, however, there is an even bigger rule of thumb : never assume you know what people value most because all it takes is 1 buyer to view a factor positively that would otherwise be viewed negatively.

PRO TIP:
SOLD LISTINGS VS ACTIVE LISTINGS : Which is the more accurate comparable?

This is frequently brought up during my first meeting with a client. Both are important to consider. Sold listings represent the market value of your home aka what buyers are paying for similar homes in your neighborhood. Active listings represent your competition in the market. In other words, sold listings represent price where as active listings represent perceived value. If your current competition on the market is priced at 15% more than what buyers are actually purchasing homes for in your neighborhood then I would strategically stay close to my overpriced competition by pricing my listing according to its perceived value in the market place even if that price may be 10-15% higher than the market value. Why? Because even if my client is willing to sell for less I’d be putting them in a position to sell their home at a price higher than they would have been able to if market conditions and competition were any different. I’d be overdelivering, keeping their best interest as my priority and showing my value as a professional.

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‘We have to take advantage when luck is on our side, and do as much to help it as it’s doing to help us.’