House Hunting Tip Guide: How to Know a Home’s Value
When you’re house hunting, there’s one major factor to keep in mind at all times: what the seller thinks their home is worth and what it’s actually worth can be two very different numbers. And that’s no fault of the seller’s.
They’re not trying to dupe anyone, it’s merely that after spending years or decades pouring your life into something, you tend to see it as better than it might actually be.
That said, if you have a house hunting tip guide to refer to, you can avoid falling into some of the most common pitfalls of purchasing a home. And we’re here to help with just that!
Listed below are a few tips for house hunting that will allow you to search for a home without the fear of purchasing one for more than it’s worth. Let’s get started.
Never Purchase Sight Unseen
With the rise of the internet, it’s never been easier to house hunt. You can “tour” homes from the other side of the country with a few clicks of your mouse. But as helpful as this can be when searching for your new home, it’s essential that you don’t take what you see online at face value.
It’s all too easy to make things look better than they are on the internet. Even if a home looks beautiful inside and out in pictures, you’re probably not getting the whole story.
You can’t tell the state of the roof, the HVAC unit, or the foundation of a home through pictures that weren’t specifically taken to do so. With that in mind, you can browse homes online to your heart’s content, but never ever purchase sight unseen.
When you’re making a commitment to buy a home, you need to know every single detail about it, the good and the bad. Which means going to the home in person and seeing it for yourself.
Use (but Don’t Rely on) Home Value Estimators
Along with the pictures and general information about homes available on the internet, you can also find a number of home value estimators. These are websites that allow you to plug in the address of any home or property and get an estimate of what that home is worth using an automated valuation model.
Once again, the algorithms that give you these numbers can be helpful during the house hunting process, but the results you find should not be taken at face value. Keep in mind that the algorithm returns a value to you even if the data it’s able to draw from is extremely limited. This waters down the accuracy of the results.
Even if the AVM you’re using gives you a confidence value of 90%, meaning it believes its estimate to be within 10% of the market value, you should always talk to a local real estate agent for a home’s true value.
Technology is a fantastic tool, but in this instance, you can beat a real-life professional’s experience and insight. You can read more here to learn more about home value from a professional.
Get Your Own Inspections
Sometimes, a home seller will have inspections done on their home before putting it on the market to determine the price they place on the house. And though we never want to believe that someone would try to take advantage of us, it’s important to consider that to be a possibility.
Even if the seller of the home you’re considering has inspection paperwork to show you, it’s essential that you have your own inspections completed. Choose a professional that you trust, either from previous experience or positive reviews, and use their findings and advice.
Remember, a home can look amazing at first glance, but have all kinds of serious, expensive issues lurking beneath the surface. The last thing you want to happen is to realize that you have structural damage months after moving into your new home.
Hire an Appraiser
Along with a professional property inspector, it’s also a good idea to hire an appraiser. In fact, it’s usually required by mortgage companies before they will approve your loan. Appraisers determine the value of a home not only by looking at the home itself but by analyzing the market, property, and comparable properties in the area.
This means they take in all information about the property, including the region, city, and neighborhood of the home, and any improvements that have been made to the house and the land. They also look at all information about surrounding homes, such as sales, vacancies, depreciation, and other factors.
Research Comparable Properties
Last but not least, you can research comparable properties in the area to get a good idea of what a fair price looks like in your desired neighborhood. Now, a real estate agent or appraiser will be able to do this research for you and give you their findings. However, there’s no harm in doing it yourself as well, should you choose to do so.
You have to be careful when researching “comps”. Just because a house sold next door for X amount of money doesn’t mean the home you’re looking at will compare. You have to think about size, location, condition, and completed upgrades.
When in doubt, consider which homes you would be interested in if your chosen home wasn’t on the market.
Use This House Hunting Tip Guide to Find Your Dream Home
For most people, purchasing a home is a bit like getting married. You’re making a legal and emotional commitment to care for this house for decades to come, if not the rest of your life.
That’s why it’s so important to have a house hunting tip guide to refer to throughout the home buying process. With these tips, you can shop for your new home with confidence that you know what to look for and what to spend.
Interested in learning more about house hunting like a pro? Take a look at our blog!