Estimating Property Values

ESTIMATING VALUE IS A COMBINATION OF ART AND SCIENCE
Homekeys was the first company in the US that offered FREE online estimations of property values to the residents of the State of Florida. Our Realtors believe their clients should have transparent access to all elements needed to make rational buying and selling decisions, and what can be more important that “property values”.
Estimating property values is easier said than done. Without exception, we all believe what we have is worth more than what it is actually worth to others. And this “gap in perception of value” becomes bigger during tough economic times as we are going thru now.
The challenge is to establish an objective, unemotional baseline for buyers and sellers so distressed sales and emotional purchases become the exception, not the rule.
It is no secret that sellers want to sell high and buyers want to buy low. But they often arrive at the negotiating table with very different ideas on price. A fair and objective property valuation can help buyers and sellers find common ground and streamline the negotiation process.
In the end, the property is worth what a buyer is willing to pay. But to help both buyers and sellers achieve their goals, both should have a fair and objective estimate of property value.
Unfortunately, even objective estimates are still estimates, and there is no way to assure 100% accuracy:
· Appraisals performed by a certified appraiser are not 100 percent accurate.
· CMA’s (Comparable Market Analysis) and BPOs (Broker Price Opinions) performed by a licensed broker or agent are not 100 percent accurate.
· AVM (Automated Valuation Model) technology is not 100 percent accurate.
All these methods, when properly executed, can provide a good indication of value.
However, we need to keep in mind that estimating value is a combination of art and science. Regardless of how scientific the approach, the actual sale price is subject to the unique variables of each property transaction: property condition, upgrades, current market conditions, circumstances of the sale and individual tastes.
For property owners, pricing correctly is a key to a successful sale.
1. Under-pricing can result in a fast sale, but carries the risk of leaving money on the table.
2. Sellers who price too high may find their properties lingering on the market, and statistics show that values can erode at a rate of about 1.5 percent per month.
3. Longer sales also increase the likelihood of a “distressed sale” when sellers become frustrated or encounter difficult financial circumstances.
Likewise, buyers should avoid emotional purchases. Overpaying because of "falling in love” with a home is common.
The science of AVMs
To determine a good baseline value for a property, Homekeys searches thousands of property records for comparable sales or “comps.” Homekeys uses advanced statistical models and proprietary algorithms and formulas to find the best comparable properties available. In addition to property characteristics, the system evaluates how recent comparable sales are and how close properties are from the property being evaluated. Once a base property value estimate is determined, it’s time to check active listings to see what similar properties are selling for.
The art of AVMs
The art portion of estimating value begins with understanding how comparable sales and active listings compare to the property being evaluated. Since they are nearby, it’s a good idea to drive by comparable sales and listed properties to see how they compare. To help you stay organized, you may want to use a buyer checklist when visiting properties.
After researching comparable sales and active listings, it’s time for the personal touch. Sellers know their own property and neighborhood better than anyone, so they are able to adjust base values according to individual property characteristics. Buyers can make similar adjustments as they visit properties to help formulate an asking price.
Depending on your research, a “market adjustment” may be warranted. If active listings are priced higher than your base estimated value, an upward adjustment may be appropriate. If prices are lower, a downward adjustment might be in order.
Finally, Homekeys enables buyers and sellers to make other value adjustments based on individual property characteristics and condition. Based on a seller’s knowledge or a buyer’s research, appropriate value adjustments can help both parties arrive at a fair selling price.
And though no property valuation system is perfect, AVMs can provide objective valuation estimates quickly and inexpensively, and the technology is improving all the time. As AVM technology continues to evolve and improve, it may prove to be a key to less-stress, more enlightened real estate transactions in the future.

Tip # 5 For First Time Buyers

Tip 5: Buying – personal decision, business transaction
The Department of Housing and Urban Development (HUD) advises home buyers to create a wish list to help focus priorities. That way, you’ll remember that a spectacular foyer is nice-to-have, but safety and services are essential. Having clear goals will help keep you from getting carried away with emotional factors. Sellers who love their homes tend to ask too much, and buyers who fall in love can end up overpaying. With a little research, you can get can get an objective estimate of property value to make sure the seller has set a fair asking price. There are tools and resources on the Web to help you better understand home valuations.
Visit us at http://www.homekeys.net/ for a full demonstration and free consultation.

Tomorrow's topic : Don't Let The Closing Costs Surprise You

AVM's with Homekeys ValueKey

The interactive approach used by Homekeys to determine the market value of a property is unique. In addition to providing historical comparables, Homekeys allows the consumer to adjust property values by reflecting existing market conditions; that is, by also providing detailed info on comparable properties that are “listed for sale”. This allows the consumer to gauge the impact of “market forces”. Homekeys is the only company I am aware of that offers free online value estimation tools that include both historical comparables and current comparable listings in determining the “market value” of a property. In addition, users are guided in reflecting unique property characteristics gathered from actually being at the property site.
To round out our self service offerings Homekeys provides consumers with a plethora of real estate information and resources including rehab and income property analysis tools, calculators, step by step buyer and seller guides, tips, original content and service providers of real estate related services at absolutely no charge…no strings attached.
Homekeys is one of the fastest moving real estate space. Feel free to contact Homekeys for details on how to buy, sell and rent easier, smarter, faster and cheaper.

How to find the best real estate deals?

First it was Homekeys who provided consumers free home value estimates of their homes in Florida. Then Zillow provided value estimates for 60 million homes in the country. Recently Fidelity National has provided a new web site cyberhomes for 100 million homes in the country and I am sure others will follow.

Something else Homekeys has offered for the lst three years that can't be found anywhere else is a patent-pending technology called ValueSearch™. If your looking for a home in Florida and want to find the best deals, then ValueSearch™ is the only search today that will show you those listings in seconds. Because we have our own GIS systems, our own AVM algorithms, and we own all the code, we have been doing it better, faster, and longer than anyone.

The NAR and the local MLS boards now have their hands full with many web sites showing MLS listings illegally. Many of these sites show MLS listings without permission and knowledge of the listing agents and are not licensed. Incorrect pricing, descriptions, pictures, and detailed information never being kept up to date plague these web sites. Tie that to estimated values and value reports that take into account this wrong data and you really have a mess.

Homekeys is a licensed real estate company in the state of Florida and is bound to follow the MLS rules and regulations. You can feel secure in knowing that when your searching for an undervalued home on the Homekeys web site, it is based on the most accurate information to date. Information received directly from MLS feeds.

At Homekeys the future is now. The future is ValueSearch™.