Find Property Values

Regardless of whether you are buying or selling, one of the first steps in the real estate game is to determine property values. Find Property Values

There are a wide variety of ways to evaluate property values. Let's take a closer look.

One form of valuation is the price being asked for the property. Many people feel the value of a home is what they ask for, but this simply is not true. Sellers want to make profits, so they tend to ask well above what an objective valuation of a property will support. Never use the asking price of a home as the value.

Another form of valuation is to do a market analysis of comparable homes sold and listed in the area. Remember, the motivation of the person doing the analysis may be a factor as real estate agents, in particular, are know to try to pump up the numbers to excite you and pick you up as a client or, on the other hand, to low ball it so as to be able to make a quick sale if he gets the listing. Just be careful to follow the rationale of the report and make sure you agree at each step of the way. 

The third traditional way to evaluate property values is through an appraisal. Appraisals tend to be very accurate, but they present problems for both buyers and sellers. For buyers, the problem is the appraisal typically isn't done until you have already agreed upon a price with the seller. Finding out you offered too much is not particularly helpful. For sellers, appraisals are costly, which is particularly problematic since they are only good for a few months at most given changing market conditions.   You can beat this problem by biting the bullet and paying $350 to $700 or so and get the appraisal in advance of signing a contract.  It is often a very good investment!