Recently former clients asked me to come over to review some renovations they were considering before selling in a few years. They wanted to know if it would make financial sense to put this remodeling investment into their home to help maximize its value. During my consultation with them, I gave them an approximate valuation of their property as is. They were shocked speechless. It was higher than they expected. “Why the heck would we do all this work then?” the wife said looking at her husband. “Let’s just sell now.” And sell they did, and are now happily living in a new home.
Often homeowners have no idea how much their property is actually worth. On-line sites like Zillow post home valuations, but as they use formulas with broad generalizations and know nothing of the nuances of an area, these valuations can be way off. Sometimes homeowners see properties for sale in the newspaper that are somewhat similar and think perhaps that’s the answer. But there are so many factors that go into determining a home’s value that they would be better off using a magic eight ball.
So how does a homeowner learn what their property is really worth? One of the skills that an experienced real estate broker has is determining a property’s value. Our firm happily provides to any potential or new client a Broker Price Opinion report, or a BPO. Though it is not as formal as an appraisal, this report is produced by using a valuation methodology. A BPO includes:
- Compiling all the property details: location, square feet, rooms, school district, tax assessment, water rights, finishes, views and other factors.
- Evaluating similar properties that have recently sold and those with pending contracts.
- Studying current listings that are the property’s competition, and reviewing the pros and cons of the property relative to this competition.
With all this data, we then determine a formal “opinion of value” and provide a report of our findings to our potential or new client.
With all that being said, for the client I noted above, I knew the value of their rural property off the top of my head. When our firm did the BPO for them, it showed I was right on the mark. After 29 years in the business, I know the Boulder County market. Still, it’s good to have the data to back me up! Their property sold for 95 percent of asking price with which they were very pleased.
What is your property worth? You too may be pleasantly surprised with the answer. If you would like a valuation of your property, we at KL Realty would be happy to provide you with a BPO. You may decide to sell now or in a few years. Either way this is excellent information to have for immediate or long-term planning. Plus, it’s just really interesting to know.
By Karen Libin, KL Realty
Karen is the owner and managing broker of KL Realty, and has more than 29 years of experience in the Boulder County real estate market. Contact Karen at KL Realty, call 303.444.3177, e-mail [email protected] or visit klrealty.net.