Local Real Estate Home Valuation
Determining The Value Of Local Real Estate
Whether you live in Los Gatos or another part of the Bay Area in California, you’re probably aware of the fact that the real estate market is booming.
Even if you’re not thinking about buying or selling real estate right at this very moment, you’re probably more than a little interested in knowing what your home be worth if you were to place it on the MLS listings.
The Basics Of Valuing Local Real Estate
Multiple factors can influence the value of real estate in California. Some of them can be influenced by the owner, but many of them are, sadly, out of our control.
Demand – How much desire or need is there for real estate in your area?
Utility – How well does your property meet the needs and desires of people who are shopping for real estate in your area?
Scarcity – How many other pieces of property similar to your home in price and features are for sale in your area?
Transferability – How easily can the ownership rights of your property be transferred to another party?
Understanding Value Vs. Cost And Price Of Local Real Estate
Value of a home is typically determined by an appraiser. This independent party is tasked with determining a fair value for the home based upon the factors listed above, as well as the recent sale price of other similar properties in the area.
Appraisal methods include:
- The Sales Comparison Approach
- The Cost Approach
- The Income Capitalization Approach
Keep in mind that value does not necessarily equal cost (what you paid for the home) or price (what the home can fetch on the open market)! When local real estate for sale is scarce, placing a home on the MLS Listings may earn you offers far above the price you paid or even the value that was determined in its last appraisal. This is why it’s so important to work with a qualified real estate broker who will put you in the best position to make a profit!