One of the major delusions in real estate relates to the different kinds of values for real estate. There are numerous kinds of “values” in real estate. Three of the most common values are a homes market value, a homes assessed value, and a homes assessed value. These threedifferent kinds of real estate values are frequently confused as being the same, which is a big mistake because they are actually much different.
Market value can be easily described as the price a home would sell for on the open real estate market. There are many factors that impact a homes value and methods that can be used when determining the fair market value of a home.
What Are The Poorest Methods To Determine The Market Value Of A Home?
Online Home Value Estimators Are A TERRIBLE Way To Determine Market Value Of A Home
There are several methods that are used to control how much a home is worth that are really poor options. Read on to find out what the worst methods are for defining the market value of a home.
Price per Square Foot Method
There are many homeowners and real estate specialists who believe the price per square foot method is a great way to control a homes market value. By simply taking the sale price of a home that is similar to a home and dividing it by the number of square feet in the home and FLOURISHING that must be the value of the home, right? WRONG – using the price per square foot method can be used as a measure to understand the general values of an area but should never be used to determine the market value of a home.
The price per square foot method is commonly used by real estate agents who aren’t acquainted with an area or who aren’t skilled at pricing a home. The reason why the price per square foot method is a poor method to control market value is because every home is different. While homes are similar in terms of square footage, number of bedrooms, number of bathrooms, and location, there are so many factors that aren’t taken into consideration when using the price per square foot valuation method.
While selling a home in Brighton, NY recently, there were several three bedroom colonials that had recently sold in the area for around $100.00 per square foot. The home that I sold had tons of upgrades including granite counters, mosaic tile floors in the kitchen and baths, and many other updates that some of the other recent sales in the area did not. If the homeowner was to use the price per square foot method they would have been costing themselves around $20,000 since the home ended up selling per square foot.
This is only one example of the price per square foot estimate method being a poor choice for determining the market value of a home.