Your neighbor just listed his home at $1,500,000. It’s quite similar to yours so, naturally, you assume your home is worth the same amount.
Do you know what the list price of a home is known as in the real estate world?
Even though his real estate agent most likely provided him with their most educated guess, based on research, the seller has the final word on how much to list the home for. Therefore, the list price of any home represents what the seller is hoping to get for the home.
Whatever amount Joe decides to take for the home, it becomes a comparable that will be used in determining your home’s market value.
Most Sellers get confused, even annoyed, at this point in the process.
Just remember that a home’s value is based on what a willing buyer will pay for it and a lender will lend on.
In Truckee-Tahoe specifically, and especially post-2020 and COVID, there are a few things to keep in mind when pricing your home for sale:
No two homes are identical
Let’s imagine that Joe’s home sold for the full list price of $1,500,000, which isn’t at all far-fetched in the current real estate market.
Both your and Joe’s house were built by the same builder and you both chose relatively the same floor plan in the same community. Therefore, your home is worth the same amount that Joe’s is, right?
Nope. You have faithfully maintained your home throughout the years you’ve lived in it.
Joe? Not so much.
Your neighbor did, however, add some improvements to his home, such as a hot tub and remote-controlled window blinds. He also chose his lot strategically, for the value it would add to the home.
Then, there’s your home’s amazing landscaping, which Joe’s house is sorely lacking.
Your home may be worth that $1,500,000 that Joe got for his home. Then again, it may not. With the addition of the hot tub and blinds to Joe’s place came more value, according to appraisers.
What else adds value to a home in the eyes of appraisers?
The general condition of the home. Since you’ve maintained your home better than Joe has, it’s a plus $ to the appraiser.
- Upgrades, additions, and other home improvements
- Location of the home
- Age of the home
- Square footage
- Floor plan
- Current market conditions and trends
- Neighborhood amenities *especially in each Truckee-Tahoe neighborhood that has its own comparables and set of pros and cons
And if the Buyer is not bringing all cash to the table, then an appraiser for a lender must also consider the type of loan the borrower will be using to accurately assess a number of other items on their checklist.
These requirements include ensuring that the home is:
- Structurally sound
In the end
You might be watching your neighbors sell, or tracking your home’s value via Zillow, however, I can tell you as a local real estate professional, you’re probably severely underestimating the equity your home has gained given we’re currently living in the most dynamic market Truckee-Tahoe has ever seen.
In order to truly understand the current value of your home, it’s best to partner with a local real estate professional (that’s me!) to run a fully personalized and timely report on the value of your home given all of the factors that must be considered.