For What it’s Worth:
How to Determine a Home’s Value

“What is my home truly worth?” Chances are, you’ve asked that question—especially if you’re in the midst of a South Carolina real estate search. Knowing a property’s value is essential for both buyers and sellers in order to ensure its worth isn’t under- or overestimated.

If you are in the midst of either buying or selling a home and you’re wondering how agents determine a home’s value, here are a few things to consider as you look for that magic number.

Get an idea by starting online

An easy starting point for finding a home valuation within your South Carolina real estate search is to start with a little Internet research. It’s as easy as entering your address into an online home value estimator. Keep in mind that though they’ll give you a general idea, they’re just ballpark figures. To get the most accurate estimate, the expertise of an actual real estate agent is the more realistic thing to trust.

How the experts determine home value

Remember that a real estate agent specializes in answering the question, “What is my home worth?” And there’s a reason for that. They have access to information the general public doesn’t.

Agents start by running a comparative market analysis, which begins with finding similar properties, or “comps,” that sold within the past 90 days to get an accurate picture of what buyers have paid. Ideally, there will be a comp close by that’s similar to yours in square footage, the number of bedrooms and bathrooms, and even lot size if in rural areas. Once your agent finds those comps, the average of those figures is used to determine the baseline of your home.

What is my home value to a buyer?

There’s a bit of a strategy behind how to list your home to sell, so if you’re selling, think about how home buyers search for properties online.

For example, if your agent suggested your home’s fair market value is $609,000, you may want to think about how you list it. That’s because many people search for homes using increments of $20,000 or $25,000. Listing it at that exact price could prevent it from being seen by buyers searching in the $575,000 to $600,000 range. Instead, consider listing it at $600,000 to generate more traffic, which often leads to a bidding war, pushing that final number to well above your original asking price. Also, unlike retail products, it’s not helpful to end your listing price at an odd dollar figure like $999,000 instead of $1 million. It’s confusing to buyers and doesn’t tend to work in real estate situations.

Try to remain objective

Personal attachment to a home often makes sellers think their home is worth more than it actually is. Trying to distill years of memories into a number can be hard to stomach. Also hard is the idea a home could be worth less than you paid for it. An agent can help prepare you for those realities.

Also, if you’ve made renovations, keep in mind that renovations typically only see a 64 percent return on investment. It’s not as simple as tacking on the full dollar amount of those renovations.

It’s important to know how much your house is worth

You need an accurate picture of your home’s worth before you put it on the market and continue your own South Carolina real estate search. Estimate it too high and it could wind up sitting on the market, unsold, which can become stigmatized if it sits too long. If it’s on the market for long periods of time, buyers expect it to have problems, and eventually, the seller will have to reduce its price until it’s below market value.

However, if you drop the number too far below market value, it can also backfire. While this strategy is smart in a hot seller’s market, underpricing your home can lead buyers to the assumption that it’s not worth more.

Your best bet is to be prepared by fully understanding your home’s worth to list it close to its market value. Most importantly, when in doubt, turn to your real estate agent to help.