How Homes.com Can Help You Find The Best Deal On A House
The interactive tools available to you on Homes.com make it easy to search neighborhoods and Zip codes for your dream home–well-prices and attractively located. As prices rise and inventories remain low in many markets, buyers need the best current information they can get on local markets and individual properties. For sellers, pricing their homes and negotiating with buyers also requires an accurate understanding of local market trends. Homes.com can help you make the right decision, whether you are a buyer or a seller.
Residential real estate markets are extremely local. Prices and values change by community, neighborhood, even from one house to another. National real estate trends, or even sales and prices in a metro real estate market, have limited usefulness. When you are making a decision about buying or selling a home, a national real estate report is about as useful as a national weather report would be if you were deciding to have a picnic in the park.
Homes.com’s ability to dig down to the level of zip codes, communities, streets, blocks, and even house-by-house with simple charts and maps puts tools in your hands that didn’t exist just a few years ago. Homes.com’s value maps and charts are excellent resources that you can use to take the temperature of your local market and guide your pricing strategy. You don’t need a master’s degree in economics or hours of research to find out what you need to know
Here are step-by-step suggestions on how to make the most of Homes.com’s tools.
Understanding Values and Prices
Homes.com’s listings contain information on each property’s value as well other factors that will help you make informed decisions, whether you are selling or buying. These include hyper-local neighborhood values, the trending value of the home, the number of days the property has been listed on Homes.com, and past sales.
Values are different from prices. Prices frequently change to reflect supply and demand in local market. If supplies of homes for sale are plentiful, sellers will lower prices to attract buyers. Conversely, when supplies are tighter, prices rise, as they are in many markets right now. In both scenarios, a home’s underlying value might remain the same, at least in the short term. Values for individual homes change direction much less frequently than prices. They are shaped by several key factors, including location, size, age, condition, buyer appeal as well as local market price trends.
If you are financing your purchase with a mortgage, or if you are hoping to sell to someone who is, accurate valuations are important. Lenders will limit the amount they will lend a buyer based on the value set by an appraiser they hire. Thousands of home sales fall through every year because appraised valuations came in lower than the agreed-upon price, and neither the seller or the buyer could make up the difference.
The values that you see on Homes.com’s maps and listings are estimates and may differ significantly from appraised values. The Homes.com values are generated by a highly sophisticated computer algorithm based on the best and most current pricing data. They take into account recent local sales, past sales, age, size, tax assessments and other factors. They are an excellent starting point for buyers and sellers, but they are not the final word on a home’s value. For example, the values do not reflect improvements, condition, current and future changes to the neighborhood such as schools, shopping, transportation, or other intangibles. At the end of the day, the value that counts comes from a licensed professional appraiser.
When you are ready to price your home for sale or to make an offer on a home, you will need to fine tune and update your understanding of a home’s value, and you can do this by using Homes.com’s data to replicate one of the important steps that an appraiser will take—finding comparable sales.
Take a Look At The Local Economy
Once you have decided on a particular local real estate market to investigate, you can get a feel for the trends by zip code or municipality.
Go to the menu at the top of the Homes.com homepage and click on “Home Values”. Enter the zip code or town name and you’ll see a map. Scroll down to review the pie charts that give you a snapshot of the local market economy. If employment and income levels are forecasted to grow, chances are that demand will be stronger than average in the years to come. That means values and prices will rise, so if you are buying and end up paying full price, you will still do well. If you are selling, you might want to consider shading toward a higher price without overpricing.
Notice the list of zip codes at the bottom of the screen below the map. By clicking on these, you come to a menu of street names. You can browse the map to get a feel for how values change on a street by street basis, or you can click on the individual properties on the map or the list of addresses at the bottom of the screen. These provide detailed information on each property. By clicking on “View Source Site,” you will be taken to the brokers’ listing for the site. You will also see a current value for the home if it is available.
Search broadly by price range and location
Before you start searching seriously for a home today, you should get pre-approved for a mortgage so that you will be in a position to make an offer when you see a home you like. You should also talk to your real estate agent to determine what you can afford in terms of total price and a mortgage, and then decide on a maximum price you should pay. Stick to this limit as you shop.
Homes can be sorted by price range and location. Search the brackets below your maximum limit as well as the one above. You might find a house that has been priced higher than it should be to get it into a higher range of buyers, or you might find a bargain in a lower bracket. Broaden your search geographically to include other neighborhoods and zip codes that you might consider after you have browsed the maps showing home values in the “Home Values” section. Also, be sure to register to receive alerts by email with new listings and price changes in areas and price ranges that you are researching.
Read Homes.com’s Listings For Information Impacting Values
Listings include a wealth of information that provide clues as to a home’s market value. First, scroll down the listing to find “Estimated Values.” There you will find an estimate generated by Homes.com’s algorithm, as discussed above. You will also see a line graph that gives you values for this home (dark blue) as well as the local neighborhood, zip code and metro area over the past two years. If the home’s value decreases over the two-year period while the other colored lines are rising, you are looking at a home that is losing value in an appreciating market, and it may continue to lose value after it is sold. Before you get serious about making an offer, you need to find out what’s going on. It may be a bargain, or it may be a headache. Conversely, if the home is rising while the local markets are stable, the owner has probably made improvements that have been reflected in an appraisal. The selling price may or may not take account of these improvements. If the house fits your budget, it might be worth the price since it will keep its value or even appreciate more after it is sold. In most cases, the value of the home will change little over a two-year period even if market values are rising. That is to be expected since individual home values change at a slower rate than local markets.
Scroll down and at the bottom of the listing, you will see two pie charts that will tell you where this property’s value compares to the averages values at one-mile, five-mile and ten-mile distances. The one-mile distance is most important. If the home’s value is less than the average of the local neighborhood, that might be a good thing. There’s an old real estate maxim that says if you are looking for value, buy the cheapest home on the block because it will appreciate as fast, if not faster, than its neighbors. If the neighborhood as a whole is appreciating, you should feel confident about the prospects for a home priced at the median, or even above median value.
Before your leave the listing, click on “View Source Site”. You will go to the listing for the property on the listing broker’s site, where you will find the number of days it has been listed. If it says “just listed” than it has been on the market for a week or less. If the number of days on the market gets close or exceeds 90 days, it could be a clue that the home is overpriced for the current market.
You may find additional useful information on the broker’s listing, such as past sales and local market trends. Some brokers also list local sold history—prices for recent sales of local, comparable homes.
Find “Comps” To Update And Double Check A Home’s Value
Appraisers find at least three similar homes that have sold within the past six months when they are appraising a home for a lender. You can do the same thing with the tools on Homes.com.
Scroll down to the bottom of a listing to find “Properties You’ll Like.” Click on the “Recently Sold Nearby” tab. These are homes sold within the past year that are located within a mile of the listing. Find three that have more or less the same number of baths and bedrooms, are the same age, and have sold within the past six months. These are the types of comparable homes, or “comps”, that an appraiser will use to appraise the listing you are considering. How do their prices compare to the asking price and Homes.com valuation of the listing? You might want to lower or raise your estimate of the listing’s value to reflect what the comps tell you.
Go back to the Home Values tab at the top of the Homes.com homepage. Scroll down to the name of the community you are researching, or the zip code, and surf around the map until you find your listing. As you zoom in, you will see different values pop up. Blue values are listings.
Good luck on your research, but don’t do it alone! Call on your real estate agent to help you. In addition to their skills and knowledge of your local market, they have access to additional market data and analytics that will augment what’s available to consumers.
Homes.com is the place to dream and discover your ideal home! Are you starting to get the itch to look for your first or next home, but don’t know where to start? You’ve come to the right place! Browse our real estate and lifestyle blog for home buying tips, mortgage guides, DIY ideas, interior design, lifestyle topics, general home inspiration, or just some homes fun. We are sure you can scratch that itch and find all the information and tools you need to help in your home search. Want to start looking at available real estate right now? Head to our home page and check out homes for sale or rent listings all over the country.
Happy house hunting!