Guessing the value of one's home
Today Kathee and I were having the "next house" conversation. We've been in our house for 16 years. When we moved in we had three kids at home: 15, 13, and 10. Now we are empty nesters. We have 4 bedrooms, a den, 4 bathrooms, etc. 3,300 square feet. Too much space!
I believe we are approximately 3½ years from selling.
Our next house will almost surely be a condominium with between 1500 and 2000 square feet of living space.
Our house is in pretty good shape but there are things it will need before we sell. The carpet in ¾ of the house is 16 years old and will need to be replaced. The entire interior will need to be repainted before we sell. The exterior is in exceptional shape thanks to a hail storm 3 years ago. Siding has been replaced on half of the house. Almost every window was damaged then and was replaced. Our roof is a 40 year shingle and it was replaced 3 years ago. Our furnace and hot water heater are almost new and high efficiency. Our air conditioner is 12 years old. It may need to be replaced before we sell. Our driveway was repaved last year.
For the past two years, few houses in our neighborhood have been on the market. So it is difficult to gage the value of one's own home. This week a house up the street from ours went on the market.
We played a little guesstimate game in the car as to what it was listed for. Kathee guessed $ 325K and I guessed $ 350K. We were not even close!
So without having a realtor connection how might one evaluate the value of one's own home.
Here's what I did:
First I checked the local MLS:
HI Jim
ReplyDeleteIf your home is a typical subdivision home, i.e., it is generally like the other homes in the neighbourhood, then it's a good idea to watch your MLS for your specific neighbourhood. Keep track of asking prices. Watch how long they stay on the market. If they sit a good while, the asking price will probably drop. If they sell within 30 days, the asking price is pretty good, usually.
I don't believe in Property Assessment values as a good indicator of value. The bureaucrats claim they reflect market value, but they are usually out to lunch. If homeowners don't diligently keep track of their assessments, they'll end up paying too much tax. We recently bought a home for $515000 (last October) that was assessed at the time for $649,000. I appealed our assessment this year based on our purchase price and the fact that the home had been on the market for over a year without selling (at steadily decreasing asking prices). I got my assessment reduced by over $100,000 dollars. So... in my years selling real estate (20), this was not an isolated occurrence. So I have no confidence in property assessment as an accurate indicator of value.
Anyway, if you watch the MLS for your neighbourhood over the next few years, you'll have a pretty good idea of value by the time you sell.
Maranatha!
Don Johnson
Jer 33.3
2/6/2013: This particular home was on the market for a week and then removed. Per a Realtor friend: the husband recently became handicapped and the 2 kids (twin boys) are off to college. So they wanted to down-size. But after a week's reflection they changed their mind.
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