What's My House Worth? Ask A Buyer

What's my home worth? That question is best answered: It is worth what someone is willing to pay for it.

Unless a home is sold to a ready, willing, and able buyer, the value is going to be an opinion. Short of offering the home for sale, that opinion is best provided by an appraiser. The appraiser’s value conclusion is their unbiased opinion of value based upon the parameters that are required to use. If offered for sale, it can be higher or lower as there are many variables that cannot be accounted for. So how is market value estimated? Short of selling it, there are three main methods:


This is the most reliable method as it is an unbiased opinion of value prepared by a professional appraiser. This is the method used for most sale transactions, refinances, legal matters, relocations and any reason that requires an objective, professionally prepared estimate of market value. Appraisers are held to standards by the state and professional organizations but you should quality and interview them to verify their level of experience. A refinance appraisal or one completed to provide an opinion of value may be different that one completed for a mortgage; that is due to the underwriting process. Expect to pay between $325 to $500+ depending on the complexity of the assignment.

Real Estate Agents

This method is marginally reliable at best. Given the number of part time non performing agents, experience levels are suspect. Also suspect is agent motivation; many agents feel that embellishing value and playing to an owner's expectations will result in a potential future client. Agents make life very difficult for appraisers as they often suggest values that are simply not there. For years I taught a class titled “Why Appraiser’s Hate Real Estate Agents”, this single reason is far and away the primary one.

Self Research

This is the most unreliable method. Just as cruising WebMD doesn't make you a doctor, the real estate sites don’t make you an appraiser. There is too much information on the web and too much of it is total nonsense. Most sites are designed to capture your information and sell it to agents – their objective is selling your information. Typically they don’t offer the same level of information available to professionals, don’t filter it for accuracy, don’t account for the myriad of variables, and don’t update regularly. Lastly – are you going to candidly assess your home? Have you had a "Zestimate"? Thoughts?

At this point, it pays to understand what the standard definition of value (market value) is: The most probable price which a property should bring a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated: (2) both parties are well informed advised, and each acting in what he considers his own best interest: (3) a reasonable time is allowed for exposure in the open market: (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions by anyone associated with the sale.

A few critically important things to keep in mind about market value:

1. It is based upon current market conditions. 
2. Data must be current and comparable to the home being evaluated. 
3. It is not based on the purchase price of the home. 
4. It is not based upon what is owed on it. 
5. It has nothing to do with what the owner or neighbors think. 
6. It is almost always below what a real estate agent concludes, they tend to inflate value estimates. 
7. It is likely to be different from an appraisal as well. Remember an appraisal is looking back, using historical data (solds). The current market has infinite variables impacting value - and buyers have additional variables influencing their actions.
8. That appraisal was not subject to underwriting. Purchase appraisals can vary significantly from refinance appraisals due to the convoluted underwriting process, this despite the fact that the comp pool is the same.

Contact me at leigh.young@cbgreatlakes.com

Leigh Young

Leigh Young

Realtor - Veteran Specialist
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