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Ever wonder how evaluators determine the value of a
Colorado home?
Even after
receiving a copy of an evaluation on their own home, most buyers go crosseyed
trying to interpret how the evaluator arrived at the value. Evaluating a home
is not that difficult a concept. The trick is to break it down into pieces.
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Think about buying a new car. Let's say you are deciding between two cars, and
both are the same make, model and are both brand-new. They have all the same
features except one: Leather interior. You can buy one car without leather
for $24,000, and the other for $26,000. The decision is that easy. It's just
a matter of whether you think having leather vs. cloth interior is worth the
extra $2000.
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Determining the price of
Colorado real estate and
Colorado real estate evaluations
work the exact same way as determining the price of a car. Unfortunately, it's
rare that any two houses are that similar. The trick in the case of real estate
is to break each characteristic down and assign a value for the differences
between the house you are interested in, and other similar homes that have
recently sold. For example, if you are interested in a home, and the home that
sold down the street is identical with the exception of a couple things, you can
estimate the value of a
Colorado home
by adjusting for those differences.
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Ignore the fact that the home you are interested in is asking $250,000. If the
home down the street was almost exactly the same, and sold for $240,000, but had
100 less square feet, and one more bathroom, you can estimate what the home with
the $250,000 price tag is really worth. The hard part is assigning a value for
those differences, and this is why most home buyers depend on Realtors® and
evaluators to help determine that value. Unfortunately, assigning values for
those differences is such an arbitrary process. That results in buyers
relying on blind faith that the evaluator or Realtor adjusted appropriately.
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Automatedhomefinder.com
has a free tool called
Automated Home Evaluator
which
was developed to empower you, as a buyer to do some of this research yourself.
It essentially allows you to do an unofficial real estate evaluation all on your
own. Automated Home Evaluator automatically determines the value for differences
between two homes, and makes those adjustments for you. To determine the value
of any property, all you need to do is get a few comparable sales in the area
from your Realtor, and then fill in a very simple questionnaire. Anyone can
do it! You can research the value for yourself, and watch exactly how the
adjustments are made! In fact, many
Colorado Real Estate
agents use
Automated Home Evaluator
to do their research, and simply show you the finished report.
Why not do some of this research yourself? After all, you're the one who will
be making the mortgage payment.
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If you'd like to determine the value of any home, simply ask your Realtor for
3 to 5 comparable homes that have sold in the recent past, and then visit
http://www.automatedhomefinder.com/evaluation.
It's simple, free, and easy to use.
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Of course, there are many other web tools available that take less time to use.
Zillow.com is one that takes only seconds.
According to Zillow®, it is
90% accurate 75% of the time. The problem is that you never know if their estimate
is 10% low, or 10% high. In addition, there is a 25% chance that Zillow® is
more than 10% off on their estimation. Based on these two factors, Zillow®
should only be used as a reference point when determining value of a property.
Using the
Automated Home Evaluator
tool in tandem with tools like Zillow.com will
help you evaluate property like a pro, and feel confident that the home you buy
will be at the best price possible!
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