What Is My House Worth?
Click the Search Bar Above if you would like to use the Cloud CMA online Market Value tool for your home.
Market Price (MP) on a restaurant menu is a scary thing. Most people have a shared common reaction: holy cow - really, what is the price?
However, MP is important. Pricing your home correctly at the Market Price (or Value) is one of the paramount factors that determines if your house will sell, and, if it will sell in a timely manner.
Before we get started with how Market Value is determined, I’d like to do a bit of housekeeping. If you’re looking for a quick estimate of the value of your home, please use this link: What’s My House Worth? This link will open in a new tab, and is directed to CloudCMA, which provides a rough market value estimate of your real estate. A Comparable Market Analysis (CMA) will then be sent to your email address, which will show you what your home is worth compared to others that have sold in your area.
If you’re looking for a more accurate and comprehensive estimate, feel free to reach out to us at (616) 888-1394, and we will provide you with a free Comparable Market Analysis for your home.
However, if you want to know how Market Value is actually determined, please read on.
As a small caveat to this guide to Market Value, the techniques discussed here are for Residential Real Estate. Many of the techniques used for Residential Valuation are similar to those used for Commercial, though Commercial Property has some unique valuation methods that I will not delve into in this blog. I am planning to write an overview for Commercial Property Valuation in the future, so stay tuned if you are interested.
The following list provides an overview of several steps for determining the Market Value of Residential Real Estate. The “steps” are not necessarily in order; they are simply individual pieces of information that relate to Property Valuation. Hopefully, these will provide insight into the overall process.
Do Not List with the Highest Bidder
When choosing a Real Estate Agent, many property owners list with the Agent who “bids” the highest. If one Agent states the property is worth $180,000 and another guesses $190,000, the property owner will typically choose to list with the Agent who guessed the higher amount.
My father has been in the Real Estate Business for over 40 years. I have aided him informally for a few years, and I have been active myself in the West Michigan Real Estate Market for just over a year at the time of writing this blog. As far as experience goes, my father knows the ins and outs of the West Michigan Real Estate market as well as almost any other Agent. Yet, our opinion of your home’s Market Value doesn’t mean a thing.
What we think your home is worth has no merit whatsoever. The only thing that matters is: what is a qualified buyer willing to pay for this kind of home, in this area, at this time.
Many sellers list with the “Highest Bidder,” as if the Agent who asks for more can convince the marketplace to pay more, and then convince an appraiser to appraise the property higher!
The correct way to list your home is to first choose the right Real Estate Salesperson/Broker to represent you in the sale of your home, and then, with that person, determine the best price to list and market your home at.
Comparable Actives, SOLDs, and Expireds
A Market Value Estimate of Residential Real Estate is referred to as a Comparable Market Analysis (CMA). A CMA often includes comparative “sold” listings, “active” listings, and “expired” listings.
“Sold” listings tell us what people are willing to pay for this kind of Real Estate, in this area, at this time. These tell us what properties have actually SOLD for. Sold properties are arguably the most important part of any CMA.
The second section of a CMA is “active” listings. These properties show us what we are competing against. Buyers for your home will likely be looking at these properties as well.
Concluding the CMA are the “expired” listings. These listings show what buyers are not willing to pay for this kind of property, in this area, at this time. In hot markets, there are fewer expired listings (though they still exist). However, in a hot market, when few expired listings exist, this final section of the CMA can also show price reductions - homes that have sold, but may have been originally overpriced.
All of these types of listings can help to determine the Market Value of your property. Adjustments may be made for varying features in different homes, but generally a good Market Estimate will provide an accurate representation of buyer willingness to pay in the local market.
Location, Improvements, and Condition
What are the three most important factors that determine what my house is worth?
Location, Location, Location.
Not surprisingly, this quote is often left anonymous - probably out of embarrassment. Yes, location is very important, but there are many other factors that influence Market Value. In the previous “step” we discussed Comparative Market Analyses (CMA), which help determine a Market Price based on current market conditions. The location of your home is very important, and a good CMA will feature “solds”, “actives”, and “expireds” that are in close proximity to the subject property.
In Commercial Real Estate, a more apt expression than our anonymous trite phrase above is: “Location, Use, and Approval.” As mentioned in the preamble to this blog, I will go into more detail about Commercial Valuation in a separate blog, but it should suffice to say that “Location, Location, Location” doesn’t cut the mustard.
My non-comprehensive substitute in Residential Valuation for “L.,L.,L.” is, “Location, Improvements, and Condition.”
We have discussed Location above. Improvements are somewhat self explanatory. I agree they can add greatly to the value of the property, but they can also be a money pit with no Return on Investment (ROI for any of you investors). If you are going to undertake an improvement solely for the purposes of increasing Market Value, I would suggest you have a reasonable assurance the improvement will pay for itself if or when the house is sold.
Moving on from location, an additional factor is the Condition of the Property. Buyers prefer clean to dirty, newer to older, no odor to odor, no noise to noise, and less work to more work. The cleanliness of a home makes a very large difference in its perceived value.
There are 33 cars that race in the Indianapolis 500. How many cars does the winner have to beat? Most people answer this with “32 cars.” Wrong. The winner has to beat only one car - the one that is in second place! The Condition and Showability of your property are very important in order to beat the home that comes in second place.
How Accurate Are Online Estimates?
The short answer for this question is: not very.
The better answer is: it depends on what you are using them for.
My father and I include online estimates in their CMAs because online estimates can help produce a very broad price range as a guideline for pricing your home. However, these estimates can be inaccurate due to (1) a lack of available information, (2) not having physically examined the property, and (3) the inherent local component of any Real Estate Market that cannot be replaced by third-party property valuation providers.
Market Analysis vs. Appraisal
Both CMAs and Appraisals provide a Market Value Estimate for real property. So, what is the difference? Accuracy.
Broker Price Opinions and CMAs are tools used by Real Estate Salespersons and Brokers to provide a Market Value Estimate. However, Salespersons and Brokers receive very little training in how to properly determine this value. Some Agents rely on experience and knowledge of the market; others take a stab at what they “think” a property is worth.
On the other hand, Certified Appraisers have over 150 hours worth of specific training in Home Valuation, with an additional requirement of 1,000 hours of practical experience. It is their job to determine the value of property. Agents can be accurate, though Appraisers are likely the better bet.
Reasons Valuation is Important
Property Valuation can be used for various purposes including:
Refinancing
Improvements - will they pay off?
Qualifying for Credit (HELOC/Bridge, etc.)
Planning for Emergencies (Liquidation)
To Sell Your Home!
To Buy A Home!
As stated, Property Valuation can be used for all of the above activities. In a few of the cases listed above (such as financing), appraisals are necessary - not a simple CMA.
How Can I Get a Market Analysis?
CloudCMA
As mentioned above, the easiest way to get a CMA is to use this link: What’s My House Worth? If you enter your property address, Cloud CMA will generate a Market Value Estimate and send it to your email.
Call Us
We’re hoping that if we repeat “Call Bill and Christian” enough on our website and in our blogs/articles, we will eventually become as well known as “Call Sam.”
If you would like a free Comparative Market Analysis, feel free to call Bill and Christian at (616) 888-1394.
Thank you so much for your time in reading this blog - we hope it has provided useful information. Feel free to call us with any questions!
Christian Rasmussen
4 March 2025
