Determining the value of a Marin home is a complex process
We’re often asked, “How do you determine the asking price for a property?” The primary tool for gauging the fair market value of a residential property is real estate comparables (“comps”). But comps only go so far, especially in a place like Marin County where many variables come into play.
What are comps?
Comps look primarily at the sold price of properties that share similar characteristics with your home. Of course, the price of recently sold properties gives the most reliable fair market value. However, asking prices of homes not yet sold are also of value because they have been evaluated (carefully, we hope) for market value.
The more characteristics your property shares with the comp properties, the more accurate pricing is likely to be. For example, if you’re trying to sell a four-bedroom, three-bathroom house, your comps would include other four-bed, three-bath houses in your neighborhood.
Key factors used to identify comparable properties include:
- Location – town and neighborhood.
- Square feet of living space.
- Size of the lot.
- Number of bedrooms and bathrooms.
- Condition.
- Improvements, renovations, and amenities.
- The price of similar homes sold within 6 to 12 months (appraisers use 6 months).
What other variables go into assessing fair market value?
Comps seek out similarities, but differences are important, too. With the exception of identical, brand-new homes in a subdivision, every property is unique. In Marin County, this is especially so, as terrain is highly variable and homes differ greatly in age, style, size, and amenities, even in the same neighborhood.
An experienced Realtor will consider many variables when determining fair market value, including the potential buyer profile. A large percentage of Marin homebuyers have young families, and homes boasting features they want are in high demand:
- Condition – Most Marin buyers aren’t interested in fixers. Homes that have been well maintained and upgraded are very appealing, and pricing will reflect that. Kitchens and bathrooms are particularly important.
- Location, location, location – Homes that are in great locations – a walk to town, in a good school district, and close to San Francisco – will sell for more, even if they have a few issues. Conversely, a very nice home high up a hills or far from San Francisco can price lower and could be a better value.
- Floorplan – Good flow through the main living areas will attract buyers. Great rooms and open kitchens are popular. Homes with quirky floorplans, strange angles or chopped up living spaces are less desirable.
- Quality of construction – Houses vary in the quality of original construction and improvements. An experienced real estate agent can evaluate the many factors from knowledge of similar homes, location, and other variables.
- Lot – Flat lots, with room for children to play, are in demand. Yards are ideally easily accessible from the house, especially the kitchen.
- Presentation – Buyers need to see how a house could look, not just imagine it! Homes with great curb appeal and stylish, current interiors sell for more.
- Primary bedrooms – Primary bedrooms located on the main floor may increase a home’s value. Buyers also expect a dedicated primary bathroom.
- Location of bedrooms – Homes with at least one other bedroom on the same floor as the primary bedroom are desirable. Parents want to be close to their young children.
- Light – Homes that enjoy good natural light generally sell for more than those in shaded areas such as among the redwoods. Homes will price higher if the interiors are painted in light colors and the lighting is modern and gives off good light.
- Noise – Homes close to a highway, busy street, or other noisy areas will sell for less.
- Views – Water and hill views are highly valued.
- Number of stories – One-level homes may be priced higher because many buyers, particularly older ones, want to avoid steps. Homes that are over two stories may be harder to sell. Similarly, if you need to climb lots of steps to reach the home, this may detract from the price.
- Half-bath – A powder room is an attractive feature and can add value to a home.
- Swimming pool – Because of safety concerns, pools don’t increase price much, if at all, but they don’t decrease the price, either.
- Busy streets – Buyers prefer homes that are on side streets rather than busy main thoroughfares.
- Driveway – Very steep driveways detract from value.
- A garage is valuable! An attached garage is more valuable.
- Access – Availability of access, including guest parking, easy driving conditions, and space for emergency vehicles to maneuver.
- Weather – In the summer months, ocean fog often comes from the ocean through the Golden Gate and across the hills of Mount Tamalpais into Marin. Because some of hills are less effective in blocking the fog, there can be tunnels of fog and wind. The effect of the fog incursions can vary from house to house and street to street. Obviously, houses that have less fog have higher value.
- Season of the year – Houses often have higher value when the market is most active, in the spring and early fall.
Beware of computer-generated valuations
Zillow and similar websites publish estimates of home values that may be useful to obtain a general idea. However, the computer algorithms do not consider many important factors, like condition of the structure, quality and style of improvements, adjacent properties, steepness of the land near the house, noise, and more. For example, in a hillside house may be insulated from road noise while a house across the street has significant traffic noise. Similarly, some homes in the same neighborhood may have level yards for convenient outdoor living, while others do not.
Accuracy of these computer-generated estimates also depends on whether or not a neighborhood is homogeneous. In a planned development, the estimates may be better because neighboring homes are similar. But in a neighborhood built over many years with different types of homes, estimates can vary significantly from the fair market value.
How can you find the fair market value of your home?
If you are interested in finding out how much your house is worth or what you can expect to pay for your next home, you’ll need to consult an experienced Realtor who knows every neighborhood in detail. Contact Madeline and benefit from her 30 years of experience in pricing Marin homes.