Would you like to know the current value of the most expensive asset you own—your home?
With a click of your mouse you can find out how much money you have in the bank or the current value of your investments to the penny. You can look up the value of your car in the Blue Book and surf EBay to see what antiques and prized art pieces similar to yours are selling for.
Unfortunately, determining how much your home is worth is a lot more complicated. Every piece of property is unique and therefore has a value all its own. The rules of supply and demand government real estate markets and changing market forces impact the value of every property, but market trends impact different properties in different ways. By making improvements or by poorly maintaining their homes, owners affect values. When sellers and buyers use the less than perfect ways described below to price homes or make offers on homes, they can impact the values of nearby properties.
Technology is improving the valuation of homes and the appraisal profession works hard to refine techniques and improve accuracy, but at the end of the day, a house is basically worth what someone will pay for it.
You might begin by deciding why you want to know your house’s value. Taxes too high? Pricing to sell? Refinancing or financing a purchase? Taking out a home equity line of credit? Valuing an estate? Personal net worth? You can answer some of these questions with a lot less effort than others.
Ranked from easiest to most difficult, here are four ways to find out how much your house is worth.
AVM Estimates. Those calculators on real estate web sites that value homes are called automatic valuation models or AVMs. They were developed by lenders like Fannie Mae and popularized by Zillow. AVMs are algorithms that estimate values based on the wide range of data, including local sales, prices and inventories. Like all calculators, they are no better than the quality of their data. They have difficulty accounting for factors like improvements to homes. Some tend to value on the high side, others on the low side. If you a good picture of the value of your home, look it up on four different AVMs. You’ll be surprised at the variations, which suggests you might get a rough estimate if you average all four. You might also think twice about using an AVM estimate to make major decision like selling your home or making an offer.
CMA. If you are already working with a real estate agent, ask them for a CMA, or competitive market analysis, or your home. Unlike the AVM, a real estate professional will do the analysis and will include the value of improvements and hyper-local changes that might affect the value of your property like transportation improvements, new retail services and schools. Your real estate agent also has access to the latest sales and inventory data from your local multiple listing service. Ask for a download of the latest data for your locale.
Appraisals. When it comes to financing a home, an appraisal by a licensed professional is almost always required. Sometimes lenders will do an AVM estimate on a refi when they know the owner. Appraisals include on-site inspections and the selection of “comps” or comparable sales – homes of the same size close to you that have sold in the past six months. Appraisers also review local market trends. An appraisal may not be the final word on the value of your home in an absolute sense; appraisers are human and two appraisers may come up with two different values. However, it’s unlikely someone would buy your house for more than the appraised value plus the down payment.
By following market trends on local real estate web sites including your local newspaper, real estate brokerages and the larger real estate listing sites that provide research and data you can get a good feel for what to expect in your local market. Real estate is all about supply and demand. When a new employer comes to town or a new plant opens, the demand for housing increases and prices rise. When the opposite occurs, prices fall. Keep track of inventory trends – they are the keys to tomorrow’s prices.
Why Use AMPI?
AMPI is the national association of real estate professionals that have, since 1956, gathered under laws and codes of ethics and conduct to create a reliable, trustworthy an efficient real estate environment in Mexico.
AMPI consists of separate autonomous sections all throughout the nation, as well as more than 4,000 associates and affiliates.
Each section is independent and has its own board of directors, only surpassed by a national board of directors comprised of twenty associates from all over the republic.
Developed over the years with the
input and knowledge of its members, AMPI is much more than just a collection of offices.
AMPI has been a solid and recognized institution in Mexico for the past 27 years. It was originally established in 1956 and was consolidated in 1980.
AMPI is currently represented in all the principle cities and regions of Mexico stretching from Tijuana to Cancun.
The Riviera Nayarita, Vallarta and Compostela chapters of AMPI are dedicated to promote the best practices in real estate by providing its members with education to reinforce the standards of ethics that give our industry the credibility which our clients deserve.
AMPI is committed to giving our membership access to a multiple listing service that forms the platform from which our industry can expand locally and into other markets while giving our members precise and up to date information that is vital to continuous improvement and growth.