How to Get an Accurate Estimate of Your Waterloo Region Home's Value
Every Waterloo Region homeowner wonders at some point how much their home is worth and how to determine their home's value. Getting an accurate evaluation of your home's value is always a smart thing to do from time to time, whether it's for financial reasons or because you're considering moving and putting the property up for sale.
There are several ways to receive an estimate of your property's value, which is sometimes referred to as a home appraisal in the real estate market. In this post, we'll discuss when it makes sense to have a home evaluation, various methods for estimating a home's value, and how home appraisals are completed.
In the end, however, a home evaluation is just one tool that aids in financial management and decision-making. No home appraisal is completely guaranteed as accurate. How much a buyer is willing to spend for a home ultimately determines its worth. It is only an educated guess until there is a sale, but the BETTER an educated guess it is, the more valuable.
Why Should You Care What Your Waterloo Region Home is Worth?
If you are planning on selling your Waterloo Region home in the near future, determining as accurately as possible what it is worth is a must as that will be one of the biggest factors when setting an asking price, something that you must get as right as possible.
To plan for your financial future.
Your home is likely one of your biggest assets, so understanding its value is critical when it comes to planning for your financial future. For example, knowing your home's value can help you determine how much equity you have, which can impact decisions like whether to refinance or take out a home equity loan.
To maximize your investment.
Even if you're not planning to sell your home anytime soon, understanding its value can help you make smart investments that will increase its value over time. For example, if you know that your home is currently worth $500,000, you might decide to invest in upgrades or renovations that will increase its value to $600,000, thereby maximizing your investment.
To be prepared for unexpected life events.
Life can be unpredictable, and unexpected events like divorce, illness, or job loss can impact your financial situation. Knowing your home's value can help you prepare for these events and make informed decisions about your future.
To plan for retirement.
If you're planning to retire in the coming years, understanding your home's value is critical for planning your financial future. You may decide to downsize or relocate to a more affordable area, and knowing your home's value can help you make informed decisions about your retirement plans.
To be a better informed homeowner.
Understanding your home's value can help you be a better informed homeowner overall. For example, if you know that your home is worth more than you thought, you might decide to invest in home security systems or other upgrades to protect your investment.
Top 3 Ways to Get A Home Assessment Explained
Keep reading to discover the top three methods to uncover the true value of your home - because knowing is half the battle when it comes to maximizing your investment!
Commission a Certified Home Appraisal
A real estate appraiser is an independent, 3rd party that is hired to do an appraisal on a property for valuation purposes. As an appraiser, their purpose is to provide a report on an estimate of value.
Unlike the other methods that will be mentioned later, appraisers are paid to provide a straightforward report, therefore eliminating any perceived bias… or so that’s the thought. Appraisers are commonly used by lending institutions and in legal matters before the courts such as divorce cases.
Pros of a Certified Home Appraiser
You are paying for the appraisal, so that’s what you get. There should be no sales pitch, simply a report provided to you.
Because they are not selling your home, there is no temptation to tell a home owner what they might want to hear.
Cons of a Certified Home Appraiser
There’s no way of telling who the appraiser is, or what their experience is.
Appraisers are rarely well paid in the real estate field, so they need to do a high volume of appraisals to make a living. This may mean not spending enough time on a property to fully appreciate all things about it that go into the value.
Appraisers might not have experience in selling, working with clients or selling in your particular area. Real estate is local, and what is common or desirable in one area might not be in another and vice versa.
Appraisers are people and still subject to their biases. Some have a tendency to value on the low end and actively look for ways to justify a lower value.
There’s an upfront cost you pay out of pocket for the appraisal, normally in the range of $500 for an average home.
Get a Home Value Estimate From an Online Service
Over the last decade, numerous companies have developed automated home appraisals offerings. From techie mortgage loan companies to international real estate companies such as Zillow, these players are promising homeowners accurate, no string attached estimates of house value.
Using terms like algorithms, data points, advanced technology, statistical machine learning these all sound very fancy. These programs are only good as the data they have. Even the largest real estate company Zillow admits homeowners should get an appraisal by a qualified professional, as their estimates should only be used as a guide.
Pros an Automated Home Appraisal
Free, quick and easy.
No need to talk to a sales person, at least initially.
Cons of an Automated Home Appraisal
They tend to be wildly inaccurate. Computers can only access the data available, which usually means selling price and basic info such as taxes and number of beds and baths. They can’t take into account subjective factors such as upgrades, neighbourhoods, unique features or other factors that can have a huge impact on value. We wrote a lot more about this here.
Computer programs don’t sell homes, and don’t know how your home compares against other homes in the area.
Companies don’t create these programs as a charity. Normally a “free” auto appraisal is tied to you having to talk to a sales person who is employed by the company or is paying that company for a chance to talk to you and not just once, but multiple times, whether you are interested or not.
Local Real Estate Agent's Home Value Assessment
When it comes down to it, the easiest and most effective way to get an accurate appraisal is by having a local realtor do a home evaluation for you.
Why is this the case? Well, for one thing, local realtors are experts in the Waterloo Region housing market. They're the ones who buy and sell homes day in and day out, so they know exactly what buyers are looking for and what factors can impact a home's value. This first-hand market knowledge is critical in properly pricing a home, as it takes into account all the factors that an automated online estimate or a distant appraiser might miss.
Of course, not all local realtors are created equal. The key to finding the right one is to look for someone with a proven track record and a deep understanding of the local market. At Team Pinto, for example, we're one of the top-performing real estate teams in the Waterloo Region, with years of experience helping homeowners like you maximize the value of their properties.
Pros of a Local Real Estate Agent's Home Value Assessment
With a proven track record and local experience, no one will beat a successful realtor at knowing the market and seeing a high amount of inventory.
Usually free if you’re a potential seller.
Will take into account your home’s special features.
First hand market knowledge – If they work in the area, they have seen the competition first hand and know the inventory. To truly understand a market takes years and viewing hundreds if not thousands of homes… which is a full time job.
Cons of a Local Real Estate Agent's Home Value Assessment
They want your business. Realtors don’t get compensated by doing free home evaluations. They do it for the chance at selling your home in the future.
Some sales people can be very pushy and try to close you with high pressure sales tactics.
Not all realtors are created equal. Service, experience and local knowledge will vary widely. This is true even from 2 agents from the same brokerage.
As you might have guessed, we recommend the third option: getting a local real estate agent to do a home evaluation. Not only is it usually free if you're a potential seller, but local agents have the first-hand market knowledge needed to properly price your home, taking into account your home's unique features and the competition in the area.
And if you're looking for a top-performing real estate team in the Waterloo Region, look no further than Team Pinto! Our friendly, no-pressure agents live and work in the area, so we know it from both a professional and personal perspective. You can schedule an appointment for a home evaluation, or even just a simple chat about your real estate needs, by contacting Team Pinto here.
Remember, a home evaluation is just one tool to aid in financial management and decision-making, but the better educated your guess is, the more valuable it can be.