Recognizing your Home's Value - Tax Assessment vs REALTOR-offered Comparative Market Analysis

Recognizing your Home's Value - Tax Assessment vs REALTOR-offered Comparative Market Analysis

It's that time of year again - property tax assessments have arrived in the mail. Most of us have some anticipation for our latest assessment report but also secretly dread what the numbers will be. Many will wonder how the assessment value of our home relates to its actual value in the market i.e. what it would sell for today. The assessment number does have value and relevance but this is only a starting point in determining the actual market value of your home.

If you are planning on refinancing, selling or buying you will need to know what the true market numbers are for your home or the homes you are thinking about. Take advantage of the expertise of your local real estate professional and request a comparative market analysis (CMA). This is an incredible tool, almost always offered by REALTORS at no cost, to estimate the value of your home by comparing "apples to apples".

Since the market value of a home is determined by what a buyer is willing, able and prepared to pay, a CMA is used to calculate market value by comparing your home or your potential home to similar properties that have recently been sold in the area. In formulating your CMA, your REALTOR will also examine "expired" listings. These are listings that did NOT sell during the listing period and are usually a good indication of the market's upper end. If a home doesn't sell during the listing period, it is likely that is was priced too high for the market.

Let's take a look at how a CMA can guide you in the buying or selling process.

If you are a seller, a CMA can help you determine recent (within the last three to six months) selling prices for homes similar to yours, the length of time these homes were on the market before they sold, the length of time it will likely take to sell your home and the homes you would be competing with if you chose to put your home on the market at this time. How you price your home relative to competition will be critical to your success in selling your home.

If you are a buyer, a CMA can help you determine what to offer on a listing you want to buy. If you are refinancing, a CMA will give you some indication of what to expect when you have your home formally appraised.

If you are thinking of selling, buying or refinancing, be sure to talk to your local real estate professional and request a CMA. It will offer you vital information about your local real estate market that will help optimize your position in your real estate transaction.

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