Just read this article in the NY Times: What’s My House Worth? The author confesses to being an information junkie and discusses how the online sites devoted to home values feed her obsession. But she runs into a great deal of contradiction and doesn’t know if her home has gained 32K in equity or lost close to 90K. She talks to an associate professor of marketing a Stanford who tells her that this kind of information can actually have a negative effect on her life: “The Internet makes it easy to get too much information, from too many conflicting sources, and all it’s going to do is to give you ecstasy on some days and pain on others.”
And she speaks to an appraiser to see how online results compare to an actual appraisal: “Those online sites rely on local sale prices, and in neighborhoods where all the housing is uniform, can be accurate,” Mr. Raful said. “But in a community like Mill Valley, where you can have a house worth four times as much as the one next door without affecting either house’s value, online sites aren’t as likely to pick the right comps.”
Living in Mill Valley must be a lot like living in St. Louis. It is block by block here and as rehabbers move into to new neighborhoods, it’s house by house. This house on Pennsylvania sold for 256.5K in 2006 and it was just a few doors down from this house on Pennsylvania which sold for 40K just a few months later. Granted there is quite a size difference here, but the major factor is that one was completely renovated and the other needed a complete overhaul.
I think if you are really interested in finding out what your home is worth you need to consult a professional. A living, breathing person who can actually visit your home, see its condition and evaluate it against the appropriate comps.
August 15th, 2007 at 6:21 pm
Yep, people love to be overloaded by information whether it’s relative or not. The internet has done the same thing for investors. The number of people I know who waste time at work watching their stock portfolio is amazing. Like what happens to the stock market in the next 8 hours is going to have a major impact on your retirement 30 years from now!
August 21st, 2007 at 5:22 pm
So what is the best process to find out how much your house is worth? Do you recommend multiple evaluations from local, knowledgeable real estate agents? Do agents charge for this, or do they do it in the home of becoming the selling agent?
Whenever we’ve had contractors work on our house we get three bids for comparison’s sake. Sadly this wastes 2 of the contractors times since they do get paid to provide the estimates. How does this work when selecting a real estate agent?
August 21st, 2007 at 5:49 pm
Great question with a couple of different answers. I suppose it depends on why you want to know the value of your house.If you are actually going to sell your home and you plan on using an agent, then yes, interview two or three agents just the way you would a contractor. We think of this a listing appointment, a job interview. I’ll write a more detailed post about the listing appointment later. If you bought your home a few years ago and are just curious about how much equity you may have built up, call the agent who helped you and see if she/he will do a CMA for you. If you want to adjust your insurance coverage on your home, you may need an appraisal. That is something you pay for and usually costs about $300. If you want to refinance or get a home equity line of credit, you’ll speak with a lender who will then order an appraisal on your behalf.