| Selling
Your Home - Appraisals & Market Value
What is the difference between market value and appraised
value?
The appraised value of a house is a certified appraiser's opinion
of the worth of a home at a given point in time. Lenders require
appraisals as part of the loan application process; fees range
from $200 to $300. Market value is what price the house will bring
at a given point in time. A comparative market analysis is an
informal estimate of market value, based on sales of comparable
properties, performed by a real estate agent or broker. Either
an appraisal or a comparative market analysis is the most accurate
way to determine what your home is worth.
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. An appraisal is a certified appraiser's estimate of
the value of a home at a given point in time. Appraisers consider
square footage, construction quality, design, floor plan, neighborhood
and availability of transportation, shopping and schools. Appraisers
also take lot size, topography, view and landscaping into account.
Most appraisals cost about $300. A comparative market analysis
is a real estate broker's or agent's informal estimate of a home's
market value, based on sales of comparable homes in a neighborhood.
Most agents will give you a comparative market analysis for free.
You can do your own cost comparison by looking up recent sales
of comparable properties in public records. These records are
available at local recorder or assessor offices, through private
real estate information companies or on the Internet.
How is a home's value
determined?
You have several ways to determine the value of a home. An appraisal
is a professional estimate of a property's market value, based
on recent sales of comparable properties, location, square footage
and construction quality. This service varies in cost depending
on the price of the home. On average, an appraisal costs about
$300 for a $250,000 house. A comparative market analysis is an
informal estimate of market value performed by a real estate agent
based on similar sales and property attributes. Most agents offer
free analyses in the hopes of winning your business. You also
can get a comparable sales report for a fee from private companies
that specialize in real estate data or find comparable sales information
available on various real estate Internet sites.
What standards do appraisers
use to estimate value?
Appraisers use several factors when estimating a home's value,
including the home's size and square footage, the condition of
the home and neighborhood, comparable local sales, any pertinent
historical information, sales performance and indices that forecast
future value. For detailed information on appraisal standards,
contact the Appraisal Institute at 875 N. Michigan Ave., Suite
2400, Chicago, IL 60611-1980; (312) 335-4458.
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