We are often asked about home values and how the entire process works – and often asked by clients, family members and friends, “why isn’t my house worth its appraised value?” Today, we decided to break that down for you.
People are always telling us how excited they are about the new value of their home. Yes, this is definitely something to get excited about, however the problem can sometimes be the accuracy of the source of the value you’ve been given. You either get a notification in the mail about the tax assessed value going up, or you refinance your house and the appraised value is much higher than what you originally paid on the house. Many times, people use Zillow and find that their house is worth something totally different than the other two estimates. So what is the real value? Let’s start with what these other three value finders are.
The Appraised Value
1. The Appraised Value is probably the most accurate of these three, but it is still not completely accurate. When refinancing your house, the lender fills out paperwork based on what you both need the value to be. The appraiser does all he can to get you that value. They have a very accurate system of doing this, but this does not always make the home worth this value.
The Zillow Value
2. Zillow is simply a website that takes the tax record description of the property, which is usually made up of the original square footage and number of bedrooms and baths. They then compare that to other recorded sales in the area. The problem with this is that no improvements or additions that have been made to the property are taken into consideration, thus the value may be off.
The Tax Assessed Value
3. The Tax assessed value is much like the Zillow value. The records used to determine the value of the house are based on recent home sales in the area. In Tennessee, this is done every five years. This value also does not take into account any improvements or additions that have been done to the property. These have been known to be wrong, and there is an appeal process if you think your tax assessed value is wrong and you want to contest it.
The true value of your home can not be determined from an appraisal, a website, or a tax assessor. The real value is whatever someone is willing to pay at any given point for your house. Real estate is obviously a market – something that we often forget. What is the most accurate way to find out your home’s value? Contact a real estate agent to find out what homes have sold in the
last six months. A real estate agent can help you determine the most accurate price according to what has actually sold recently, not by some dream price that your neighbor is attempting to get down the street!
Many people think there home is worth a lot more than it actually is; don’t make this same mistake! Listen to what agents tell you — or at least let the statistics speak for themselves. Ask an agent to email you the comparables that are most similar to your home so you can see for yourself what your home is really worth. Think like a potential buyer: what would you pay for your home based on similar homes that have sold recently?
If you have any questions about home values, or would like assistance in determining the value of your home, contact us today here.