WHAT IS YOUR HOME REALLY WORTH?

Forget the rumor mill. Before you even think about putting your house on the market, you have to know what your house is really worth. I don't mean what you think it is worth. In fact, for you to arrive at an accurate assesment of your house's true value, you'll need to check your ego at the door. The best way to do this is to get the latest Home Assessment Report for your neighborhood.

With the fluctuating real estate market, home values are a lot like the stock market. You need to buy low and sell high. Contrary to urban myths about home values, here is what really affects the value of your home: the neighbors in your subdivision. You really need to keep up with what's going on around you if you are thinking about selling or buying a home. You want to buy in an increasing instead of a decreasing neighborhood. By this, I mean that you need to beware of who is selling what and for how much. You also need to keep track of what sold recently, because that is one of the factors that determines your home’s value, not some newbie real estate agent that knocks on your door and says. “ We just sold a house a half mile down the street for twice as much or less as what yours is really worth.”

If this happens, you need to find out if that house is in the same subdivision as yours. If it isn’t, you could be in for a surprise after the contract is signed and you find yourself on the wrong side of the negotiating table. That is not to say all real estate agents don't know what they’re talking about. Just make sure you know who you are working with and know what questions to ask.

Question One: What subdivision is it located in?

Question Two: What type of house was it and is it just like mine?

What I mean by this is you can’t compare a split foyer to a colonial with the same square footage as they are very different from one another.

Question Three: Were they exactly the same or are there differences?

What I mean by this is that there are a lot of factors to take into consideration. Say for example your house is 2100 square feet above grade (that means ground level and up for those who don't know) and your neighbor’s house a few blocks down is 2200 square feet above grade. You would think your neighbor’s house would be worth more, right? Wrong. There are a lot of things that go into deciding how much a house is worth, such as age, when the house was built, how many bath rooms does it have, how much land is it on, does it have an attached or detached garage, does it have a full basement, is it brick or does it have siding on the exterior, does it have central air and my personal favorite, has the garage been turned into an in-law suite, which is normally worth more than just a garage itself. Is the pool built-in or above ground? Believe it or not, most of the time above ground pools decrease the value of homes. And last, but not least, what kind of upgrades have been done, like new cabinets, new counter tops, bath rooms remodeled, tile fixtures, bathtubs, sinks and toilets been replaced, new bath rooms bene added, new windows or siding, has any more square footage been added to the house, like a guest room or sun room? When you add square feet to a house, that really brings the value up.

Of course, unless you are a certified appraiser, there is no way of knowing some of these things about your neighbors house unless you ask. However, there are ways of getting a general idea. Before you buy any house you should always contact a certified appraiser. It is worth the $100 to $200 to find out what the value has been over the last two to three years. There are also other ways to find out in general what's going on, like signing up here for your free home value report. It will give you a general idea of what's going on around you. If you have any questions you can contact me personally.

What you need to beware of are some of the urban myths that people think add value but really don't, such as adding new carpet, painting interior rooms, adding and repaving to the driveway. These are things that add little or no value at all. They make the property look nice but you spend more then you make on these items.

In a nutshell, these are the most important factors to look at when buying, selling or refinancing a home. These are also some of the things that lenders look at when deciding on how much money they will lend you. To learn even more, sign up for my free newsletter which keeps you on top of of the market, as well as providing you with other valuable tips.