What's the big secret to find current market value? Digging deep.
We all agree that it's a seller's market today in real estate. Not enough listings to feed the appetite of well qualified buyers aching to take advantage of historic low interest rates. If you are a buyer or a seller in today's market, you'll be having discussions with your Realtor to look at the comparable sales (similar neighborhood, size, number of bedrooms, and condition) to access each homes value. Your Realtor will call them "comps."
With that in mind, here are the top four things you need to know to gauge the current market value today.
1. Pay close attention ONLY to the comps that have actually closed in the last six to eight weeks. Prices are trending up right now and you want the most recently closed sale you can get your hands on. The ones that opened escrow six to eight weeks ago and have already closed would be an even better indicator of current market value.
2. Make sure you know the whole story regarding the sale. Was there a short sale negotiator that the buyer had to pay that isn't reflected in the closed price? Were there back due taxes or HOA dues that the buyer had to pay? Did the seller pay some of the buyers' closing costs? Your Realtor can dig under the surface to help you see the whole picture.
3. For short sale comps make sure you know when escrow was opened. If it was eight months ago, the buyer got a smoking hot deal and that price cannot be compared to the homes that just opened escrow six to eight weeks ago. It is not a valid comp.
4. Try to only look at comparable homes that are within 1 mile of each other. For unique homes or country property this guideline is less stringent.
Since offers are not confidential (unless a seller requests it) this means your Realtor can find out as much as possible to help you be successful. Look for all the seller considerations, fees, credits, etc. for each sale. Many of them can be found in the MLS agent remarks. These for-agents-eyes-only remarks offer a ton of information and can't be found on Realtor.com, Trulia.com or Zillow.com. It's worth the effort to find an agent willing to go the extra mile and uncover the information when considering the sale or purchase of you home.
Sheri Aguilar is the president of the Lodi Association of Realtors and can be reached at Sheri@YourLocalAOR.com