Redondo Beach Home Values
Everyone loves to check out their home's value with instant online estimates. It seems that whenever you go to Facebook you'll even see one popping up in your news feed. Maybe even from me.
While these are all a lot of fun, the truth is they are not very accurate in Redondo Beach - even the ones that I offer (see above - but use it anyway!)
Maybe these online estimates are more accurate in other cities, particularly master planned communities with a few variations of the same floor plan. But around here, not really.
Let's say we are comparing two Tall and Skinny Golden Hills houses built in the 1980's by the same builder, on the same block, let's make it even next to each other. Age, size, bedroom bathroom count all the same, etc.
One has been totally remodeled including brand new kitchen, bathrooms, floors, roof, tankless water hear, windows and garage door. The other is in all original condition.
Is the updated one worth $150K more than the original one? Absolutely. But what happens once the updated property sells? The estimate software adjusts the price of the original condition property to reflect the closed sale or "comp". Which is why all the automation tools have a material degree of error: the "software" has not been in the house. Chances are I have.
I can keep going with more examples such as the difference between attached or detached two on a lots, middle or end unit 3 on a lots, busy streets, etc. But you my reader are smart and totally get this.
If you are really interested in determining the value of your home, here's a few ways to determine how much it might be worth:
- Broker's Price Opinion (BPO)
- Automated Valuation Model (AVM)
- Comparative Market Analysis (CMA)
Unless you are an all cash buyer, there was (or will be) an appraisal done on your home when it is purchased or refinanced. Appraisers are licensed and follow a certain set of clearly defined rules. But, even within their guidelines there are subjective adjustments made and values assigned (such as how much a view is worth, value of some improvements over others etc.)
If you are seeking the value of your home to settle an estate, as part of a divorce proceeding or other legal matter, it is best to pay for a written appraisal from a licensed appraiser. If your property is one with truly no comps (and very few properties really fall into this bucket) and you are thinking of selling, an appraiser is the way to go. Other than that save your money and rely on your Realtor for a CMA or BPO.
Two Appraisal Facts:
- Appraisals are considered "opinions" so unlike other transaction documents, the appraisal does not need to be disclosed to the other party.
- Your value for a refinance may be different than what an appraiser will do on a purchase money sale. Why is that" To protect the bank, of course.
COMPARATIVE MARKET ANALYSIS (CMA)
The textbook definition of a CMA is:
"An examination of the prices at which similar properties in the same area recently sold. Real estate agents perform a comparative market analysis for their clients to help them determine a price to list when selling a home or a price to offer when buying a home."
Based on the tons of paper generated on these you would think that Realtors love to do CMAs. Every listing presentation includes a CMA. But for the most part they are not worth the paper they are printed on. Here's why.
The Realtor selects the "comps" he or she wants to include and can influence the final price conclusion either high or low by choosing or not choosing to look at certain sales. To a certain extent an appraiser can do the same thing but there is a formal rebuttal process with an appraiser that doesn't exist for a CMA.
A variation of a CMA is a BPO or Broker's Price Opinion. This is a format used by banks for foreclosures and short sales. It is similar to the appraisal form in that it is a pre-set format but dissimilar in the manner in which adjustments are made.
AUTOMATED VALUE MODEL (AVM)
The AVM is a computer generated algorithm that crunches the numbers taking into account factors such as house SqFt, lot size, rooms, age, location, recent sales etc. They not accurate because the computer has not been in your house (wait a few years for more advance Artificial Intelligence).
Every homeowner likes it when the AVM estimates high and grumbles when the value is lower than expected.
My version appears at the top of the page. It is about as accurate as everything else out there.
So, How Much Is My Redondo Beach Home Worth?
Funny you should ask.
The best way to find out is through a Real Estate Agent who a) you trust and b) is active in the neighborhood.
A good Realtor will look at comps including current listings and properties in escrow and other factors such as absorption rate, days on market, price reductions, price trends and other factors and come to a determination.
Most important is that a neighborhood Realtor, if he or she is good, has been in the homes that are used as comps. Presumably they were on the market at some point and part of our job is to know the inventory.
Curious as to your home's value? Just call Ellis at 310 975 5139.