The best way to determine your home’s value is to know what recent, comparable sales have closed for in your area. Easier said than done, as the tough thing with finding comparable homes in New Jersey is the wide variety of housing stock. On the same street, you can have a colonial built in 1880, next to a new McMansion, next to a 1950′s ranch.
What makes a good comparable sale you ask?
There is no 100% accurate way to know exactly what your house is worth. Of course, if an exact replica of your house sold on your street yesterday, that would give you a clear indication of your value. Here is the criteria appraisers and real estate agents use to help determine the value of your home :
- Location, location, location-the closer the comparable the better. Depending on the area, comps should be within 1 mile. Also if your house is located on a main road, next to railroad tracks, or a commercial property, your comparables should have similar external inadequacies.
- Style of your home (colonial, cape cod, bi-levels, etc)
- Interior square footage
- Lot Size
- Condition-whether your home is straight out of the 1970′s with shag carpeting and Harvest Gold appliances or has been completely renovated, try to use comparables in similar condition.
- Amenties-# of bathrooms, finished basement, deck, porch, inground pool (depending on the area, might actually be a negative feature), patios, etc.
- Try to use the most recent comparables as possible, many lenders are requiring appraisers to use closed sales within the last 3 months. I wouldn’t go any further back than 6 months, unless there are truly no comparables.
- Also look at what the active listings in your area are going for. Most lenders are requiring appraisers to include active listings in their reports, as they may be an indicator of declining values in the neighborhood.
Try not to use short sales or foreclosures as comparables, because often they sell at below market values.
Condos are a lot easier to find comparables, as often there are sales in the development and most of the units are similar.
Speaking of Zillow, I am not a big fan of their “Zestimates” which in some cases may be accurate, in others way off. Its not a substitute for an appraisal, which they admit.
Or you can just save yourself all the aggravation and have a qualified REALTOR® do a Current Market Analysis (CMA), which are completely free or hire a licensed appraiser to perform an appraisal of your home. Appraisal fees vary, an average, single family house is usually between $250 to $350 to appraise.