Assessing Your Home's Real Value

There's a famous cartoon I've seen circulate among the Real Estate Professionals that shows what a given property looks like through the eyes of the various parties involved in a real estate transaction. The Seller, of course, sees their home as a castle. The Buyer sees it as a small cottage. The Assessor sees it as a mansion. The Appraiser sees it for what it may actually be... These are all natural carnations with Sellers being emotionally tied to their property and most Buyers simply looking for the best deal possible. Our goal in any transaction is to hopefully bring the parties together so everyone feels they've somewhat reached their goals. Most Sellers are truly willing to sell for a fair market value and most Buyers are willing to pay that fair market value. It's coming to that agreeable number that gets in the way sometimes.

One tool can be the SEV (State Equalized Value) on the property. The problem with SEVs is that they are purely objective and are generated solely with data about other sales. Most Buyers fall in love with a home or choose which one to buy based on the more subjective features. How the home is situated on the land, the quality of the view, the setting relative to the water, the architectural character, etc... None of these factors are taken into account by the average Assessor as it would be impossible for them to look in such detail at each property in their Township or County. For this reason SEVs can be very inaccurate. I once did a study for a buyer client who was convinced the SEV was "law" on value on The Manistee River. I pulled up the 8 most recent sales and compared their sales price to the SEV at the time of the sale. The difference ranged from 32% below SEV to 28% above SEV! Hardly a consistent source of reliable market value.

The best way to determine the true market value of a given property is to compare it against the most recent sold comparable properties that are available. This is what a licensed appraiser does and that is what opinion the lenders rely upon. Even Appraisers, however, are held within strict constraints in terms of adjustments from one property to another. This creates problems especially with very unique properties. If you're looking for that one of a kind showplace, know going in that you're not going to likely find any comparable properties to help you in determining price. That's exactly why you're likely drawn to that particular property.... it's one of a kind!

We specialize in the marketing and sale of these unique properties and can assist you in setting an effective list price (Sellers) or determining what is a fair price to pay (Buyers). Especially when it comes to unique properties, rely on someone who is very knowledgeable about the local market and has immersed themselves in those sales over time. Those are exactly the agents we find to work for Homewaters, L.L.C. Good luck in your hunt for the right property!!! Let us know how we can help.