Appraisals and Market Values
What’s a house worth? A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property’s value, most people turn to either an appraisal or a comparative market analysis.
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What are the standard ways of finding out how much a home is worth?
Comparative market analysis and an appraisal are the standard methods for determining a home’s value. A Real Estate Agent researches comparable recent sales & currently listed properties that are similar in size, construction, and location & will provide you with an informal estimate of their opinion of value in the current market. Most Real Estate agents provide this service for free and this is the method they generally use to determine the listing price when a home is listed for sale. An appraisal, which can cost $250 to $400, is a certified appraiser’s opinion of the value of a home at any given time. Appraisers review numerous factors including recent comparable sales, location, square footage, and construction quality. An appraisal is regularly used by banks and lenders to ensure the value of a mortgage falls within an acceptable range of the value of the property. An appraisal may also be used for determining the value of an estate or foreclosure sale.
Appraised Value? Market Value? Assessed Value? List Price? Sale Price? What is the difference?
The Appraised Value of a house is a certified appraiser’s opinion of the worth of a home at a given point in time and is usually required by lenders as part of the loan application process. The Market Value is the estimated price the house will sell for at a given point in time and is determined through a comparative market analysis performed by a real estate agent or broker. The Assessed Value is the value given to a property by the local assessment authority and is determined thru the collection of historical data, market trends, and occasionally site visits. This value is the basis for the amount of property tax charged by the municipality and does not always reflect the current market or appraised value. The List Price is the seller’s advertised price and is usually a rough estimate of what the seller wishes to the net when the property sells. The Sale Price is the amount of money you, as the buyer are willing to pay (or paid) for the property.
As you can see, there are many different factors that determine the value of a home and, as with most things, the value is in the eye of the beholder! A Johannsen Group Agent can help you determine the value of your home in today’s market or help you evaluate the price of the home you wish to buy and help ensure you are making a wise investment.