For many, buying or selling real estate is not an everyday occurrence. While experience with a handful of purchases or sales throughout one’s lifetime certainly makes an individual more real estate savvy than the average consumer, there are many myths afloat surrounding real estate. From improperly estimated online home valuations, (that often misrepresent your home’s actual value), to believing the market will only go up; buying into certain real estate myths can cost you money if you are buying or selling a home. While many buyers and sellers feel that they understand the real estate market through and through, expert council from a real estate professional is the only way to debunk today’s most common real estate myths, improving your chances of buying or selling the right home at the right price.
‘Online Home Value Estimates Are Always Right’
Homeowners who seek an estimate of their home’s value online, often discover that the price they find doesn’t match up to the actual value. According to National Association of Realtors, Automated Valuation Models, or AVMs, are based on computer algorithms and calculations that take varying sets of property data and look for patterns between property value and the input data. In theory, this allows web visitors to find a home value estimate easily and quickly by simply searching an address, but often, there are discrepancies within these estimates relating to the unique qualities of a home, neighborhood, or local market.
For example, Zillow’s “Zestimate”, is computed using public and user-submitted data with varying accuracy levels depending on the data of the property and location. These estimates should not be confused or used as a substitute for appraisals, which use comparative market analyses and in-depth expertise of real estate professionals to draw a conclusion on the value of the property.
‘The market is steady and predictable’
Similar to the old adage, ‘the only thing constant, is change’, can be said of the real estate market. While Colorado continues to enjoy a robust and healthy real estate market, levels of supply and demand can change quickly. It is always best to have the council of a trusted real estate advisor on-hand, should market conditions fluctuate surrounding events like an election, or a dramatic event, like major shift in inventory, were to suddenly occur.
‘A home inspection is the same thing as an appraisal’
Don’t be confused by a home appraisal and a home inspection. While both are used as safeguards for the buyer (and the buyer’s lender), home inspectors and appraisers have very different jobs. While they both investigate your home, the inspector’s job is to uncover safety concerns or issues with the home, while the appraiser’s job is to find the objective market value of the property.
The appraiser will use comparable home sales (similarly to the way your agent determines your home’s list price), in addition to taking into account a home’s condition, square footage, and location. Appraisers also note the quality and condition of the plumbing, flooring, and electrical system. With data in hand, they make their final assessment and give their report to the lender.
All long as deals are being transacted, ‘myths’ surrounding real estate in Colorado, (and in all markets), will likely continue to occur. By relying on an experienced LIV Sotheby’s International Realty broker to ‘debunk’ today’s most common Buying and Selling real estate myths, you will be well on your way to making better financial decisions when it comes to buying, selling or updating a home.