HOW WILL ZEN REAL ESTATE GROUP MARKET MY PROPERTY?
WHAT IS MY HOME WORTH?
WHEN SHOULD I SELL
WHAT IS “ASSESSED VALUE”?
What is an Automated Valuation Model ("AVM")?
Automated Valuation Models (otherwise known as AVM's) are algorithms used by 3rd party applications to automatically provide valuation on a property's value. One such example of an application is Zillow and their valuation model called Zestimate©. Any member of the public can access the Zillow site, plug in an address and Zillow will automatically spit out a price/price range as to what the value of that property may be worth.
Like all AVM's, Zestimate© is generated using Zillow's proprietary algorithm which utilizes a variety of factors such public records and properties that were recently listed or sold to establish a range for that property's value. The "intelligence" behind these AVM's continues to advance every year however it is important to note that there is rarely (if ever) any human interaction involved in providing these valuations. This can cause substantial deviations in actual market value, sometimes up to 30% and sometimes even from one day to the next! For this reason, AVM's should only be used as a "guideline" for consumers interested the valuation of a property.
Providing a more accurate valuation can only typically be achieved by a licensed real estate agent/appraiser. They perform a much more detailed assessment called a Comparative Market Analysis (CMA) and through this process can establish a much more targeted and realistic market value.
What is a “CMA”?
A Comparative Market Analysis (otherwise known as a CMA in the real estate industry) is a method used by real estate agents when establishing a property's value. It is commonly used to help sellers determine market value/list price and for buyers in establishing what is an appropriate amount to offer when considering a purchase.
During this process, we search active and historical market data, using the comparable and adjustment valuation model. Using specialized real estate mapping technology, we select the appropriate location and radius applicable to your property in an effort to locate comparable properties. This includes properties that are currently active on the market, properties that are pending (under contract, waiting to close) and comparables that have sold within the last 6-12 months. We then attempt to locate and select comparable properties that are as like kind as our subject property as possible. This includes identifying key factors such as number of bedrooms, bathrooms condition, style, square feet etc.
With unique properties, rural locations and in certain markets or seasons, locating good comps may be difficult. It may therefore be necessary to branch out further in radius and/or choose properties that are slightly different (square foot, lot size, style etc.). Once we have identified good comparable properties, we will make dollar adjustments for any differences between our subject property and our comparables. This includes differences such as bedrooms, bathrooms, square feet, garages, lot size, zoning use etc.
Once the appropriate adjustments have been made, a recommended price range is generated which provides the average "selling" price and "list" price for your home. We then take the average of each of these ranges combined. Finally, we will "slide" the value of your home up or down on this scale taking into consideration factors we think in our best experience best reflects the market value of your home.
It is important to remember that the suggested price is intended to be a guideline only. Real estate valuations are not an exact science and there are many factors that will determine how quickly and for how much your home will sell for. Comps chosen, valuations and the stated adjustments may be subject to change. CMA's are typically only accurate for 30-60 days. In order to establish an accurate market valuation, a re-assessment may be required just prior to putting the property on the market.
Factors that could increase or decrease this valuation may include; listing time (season), property condition (some assessments are conducted as a rough guideline prior to actually visiting the property for proper assessment),any repairs/improvements scheduled to be completed prior to putting the property on the market and the owners intentions for re-sale (needing a quick sale versus wanting highest possible market value).