What is my house worth?
This is a question many property owners who want to sell home quickly Chicago find themselves asking before they pull the trigger on selling their homes.
After all, answering this question is crucial to selling at a high price, and more importantly, helping you figure out your options. But while this is a straightforward question, it doesn’t always have a direct answer.
Distressed Property Evaluation Overview
Here’s what homeowners need to know about distressed property evaluation Chicago to help them understand the “cash offers” offered by companies that buy homes for cash.
When you know exactly how much your distressed property is worth currently, how much it will cost you to make repairs, and how much the house will be worth after the renovations, you know how much to expect from selling to a “we buy houses” company.
Value vs. Cost vs. Price
Houses don’t have a fixed price tag; for this reason, they don’t have a fixed value. The value is constantly changing based on what property buyers are willing to cough up.
Price is what a property buyer actually pays, the cost is what it would cost you to build a similar home today, and value is what a stranger would theoretically pay for a property based on today’s market forces for similar real estate.
Not all house evaluation is created equal; this is especially true for distressed property. Typically, valuation refers to the “fair market value” of a property.
On the other hand, distressed houses are not sold on market value. Besides, different types of property buyers can use a different real estate evaluation method.
Real Estate Evaluation Methods
Appraisers, home inspectors, realtors, and “we buy houses” companies use three evaluation methods when determining your property’s value. These methods include:
1. Income Capitalization Approach:
Here, the property’s value is determined by the property’s ability to generate income.
2. Sales Comparison Method:
This is perhaps the most common way realtors and appraisers estimate a property’s value.
It involves analyzing comparable properties in the same area.
3. Cost Approach:
This approach considers how much it would cost to purchase the land and build a perfect new home.
Of course, the appraiser will assess your home’s current condition.
The appraiser will use the depreciation technique to estimate how much less your current house is worth compared to a similar brand-new house.
Most “we buy houses” companies tend to use the cost approach when determining the value of a distressed property. Some factors cash homeowners take into account for depreciation include:
– Your home’s physical deterioration
– Economic obsolescence
– Functional obsolescence
When you go to sell your old, unwanted, or rundown home to a reliable distressed property buyer in Chicago such as I Buy IL, their appraiser will evaluate your property to determine its value.
But it pays to have your own accurate estimate of both the as-is and after-repair value.
When you can accurately evaluate your rundown property, you increase your chances of selling at a favorable price even when you sell home quickly Chicago.