Just because the “average price per square foot” in a given neighborhood is $150, that doesn’t mean your home is worth that. It could be worth more, or it might be much less.
I’ve put together a “competitive market analysis” (CMA) for more than 3,000 properties over the years. I actually honed my skills during the dreaded short-sale days, when lenders required at least six “broker price opinions” (BPOs) for every deal. Valuing properties is almost second nature to me.
Of course, there’s what I think, based on years of hands-on experience and researched data, and what the homeowner believes, based on (sometimes) gut feeling, hopes, and what their friend (who used to be an agent in Illinois) thinks.
An experienced, competent, and honest real-estate professional should be able to tell you the market value of your home within 2 to 3 percent of the actual value. Why? Because a proper home valuation is largely based on principles, not conjecture. Those principles are location, comparable home sales, market conditions and property condition. That’s it, period.
All things equal, a one-story home will sell for more per square foot than a two-story. If there are two identical homes in an area and one has a gorgeous mountain view, while the other backs to a busy road, the view house is valued higher. If there are two exact models side-by-side, one with the same fixtures, flooring and dirt in the backyard that it had when built in 1985, and the other completely remodeled with a beautiful pool, pool guy wins.
As many people experienced during the boom/bust, what your house was worth last year can be vastly different than its value today. In a typical North Phoenix market, an appraiser will look back only three-to-six months for comparable sales. That’s good in a rising market, not so good in a declining market.
If you want to get a good idea of what your home is worth, have two or three experienced, local agents give you a CMA (they’re free). If you’re still not convinced, hire an appraiser for about $500 to do a detailed appraisal. Just make sure they’re not fresh off the plane from Chicago.