What is my home worth? The quintessential question asked by every homeowner ever! The answer is; your home is worth what someone is willing to pay for it. Not exactly the answer an owner is looking for, as we want concrete numbers expressing value.
Value, like beauty, is in the eyes of the beholder.
Your home’s appraised value represents fair market value. A property appraisal, usually conducted on behalf of a mortgage lender, will enter the premises, check out building materials, improvements, size and recent sales of comparable homes in the same area and make an estimate of the fair market value.
Your assessed value is based on what the tax assessors determine from their reviews. Generally they don’t enter the premises, and may or may not reflect what you could actually get for the property if you sold it. Homeowners can get very excited about their assessments; either for or against! If it’s too high and they are getting ready to sell, happy face! Too high and staying, sad face, higher taxes. The reverse is true when assessed values are low! Happy to pay less municipal taxes, sad if home is going on the market.
The greatest challenge for realtors is determining listing price. There is so much criteria to consider: size, lot, neighbourhood, building style, landscaping, finishings, assessments, Home Price Index, etc. It is not a blind shot in the dark, but a qualified analysis of a multitude of factors.
Let’s take a look at a few examples:
- Two sides of a duplex are for sale. They are mirror images of each other and have the same lot size. They are twenty years old. The tax assessed value is the same for both sides. One side is clean and well maintained. The other side has had extensive renovation work done and is a joy to behold! Are they worth the same amount if both come on the market at the same time?
- Two lots in Fairfield are on the market. They are both 6000 square feet, both on the same street. One lot is clear, the other has a tear down structure on it. Are they worth the same amount?
- An eclectic, unique, architectural house sits amongst a development of well-built but standard homes. It’s assessment is equivalent to the rest of the neighbourhood. Is it worth more than the others in the development?
I would love to hear your thoughts on these. If you have a moment, make like a realtor, send me an email and let me know what you think.