What Determines My Home’s Value?

by seacoast_ashley 11. February 2014 06:55

North Carolina Home ValueWhat determines my home’s value?...This is a common question that Realtors® receive from sellers. Often, sellers confuse a home’s tax assessed value (what they see on their tax bill) with the fair market value, the amount a home will sell for when the property has been exposed to a reasonable amount of buyers in a competitive market for a reasonable amount of time. In actuality, the tax value is based on a formula used by county tax assessors. They take what they believe is the fair market value of your home, multiply it by a percent decided upon by local legislation, and that’s the tax value. In New Hanover County, property is taxed at 100% of fair market value; however, in other counties, it may be 70% or 80%.

Now, you may be wondering, if it’s taxed at 100%, why isn’t the tax value and market value the same? Because property isn’t evaluated every year. In New Hanover County, it’s evaluated every 6 years. North Carolina requires at least 8 years. A lot can change in that span of time and your true fair market value could change as early as 6 months depending on how homes are selling in your area.

The fair market value of your home is determined by similar homes sold within the past year, preferably within the past 6 months. The more recent the sale, the better. When choosing comparable homes, real estate agents look for homes with similar:

  • Bedrooms
  • Bathrooms
  • Heated Square-footage
  • Heating/Cooling Systems
  • Garage Spaces
  • Lot Sizes
  • Home Styles
  • Locations

They want more than one comparable, because the last sale may have incalculable factors, like the property being in distress or the buyer feeling so emotionally tied to the property that they were willing to pay more than fair market value.

Real estate agents also take into consideration current listings and existing home upgrades. For example, a home with wood floors could ask for more than a home with laminate. While you would think that more valuable building materials would add value to a home, that’s not always the case. If you upgrade your home with materials that don’t fit with others in the neighborhood, there may not be a buyer who is willing to pay more and you could be throwing away money.

If you are trying to figure out what to list your home at, it’s important to go by the fair market value of your home and not the tax assessed value. Your Sea Coast agent is the best person for determining the most competitive listing price for your home, and they can do this with a Comparative Market Analysis (CMA). Don’t have an agent, find one today.

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