In a minute I’m going to introduce you to a very simple calculator that will have you figuring appreciation rates in seconds.  But before we get right into the calculator, let’s discuss why you might need to know an appreciation rate in the first place.

Imagine yourself getting ready to go out on that listing appointment.  You’ve prepared a good CMA (comparative market analysis) and you’ve looked at all the recent sales in that area fairly closely, making mental notes in case the seller doesn’t like your price.

What if you could enter a couple of numbers into a calculator, and click a button and have the historical appreciation for the seller’s subdivision or comparable properties?  You can, as you’ll se in a minute.  All you’ll need is two pieces of information you can get from your MLS.

Or what about dealing with that buyer that is under the mistaken impression that he can low-ball any house and effectively steal it because it’s a “buyer’s market”?  Generally speaking, no amount of arguing will dissuade him, but what if you could pull hard data and show him what the market really is saying?  Using this Appreciation Calculator, you can do just that.

All you need is two pieces of information — the base value and today’s value, and of course, the time frame.  Let me show you what I mean.  Suppose you had a “target home” that was purchased 5 years ago.  Go to your MLS, and pull up all homes (or all homes in a neighborhood, or some other subset of the market) and get an average sale price.  Your MLS will do that automatically.

Next, go to the average sale price in the most current year for the same subset.  Let’s assume the base value was $200,000, and today’s average for the same subset is $250,000.  You have a growth of 25% over 5 years or 5% per year.  Of course you can do that simple example in your head.  Using the calculator, you can put the numbers in and click a button and instantly have the number.

Now you take the appreciation rate and apply it to the sample property to arrive at an estimate of what it’s appreciated value is, based on the appreciation of the market or market subset.  Suppose the seller want’s more than that, or the buyer wants to offer substantially less than the average list-to-sale price would reasonably indicate, you now have the hard data to help guide them into a better decision.

And, having accurate appreciation rates gives you a huge advantage over the typical agent, who is probably just winging it.  So try out this free calculator and let me know what you think.  Here is a link to follow:  Go to calculator »