Determining the Value of Your Home
In today's real estate market every homeowner is asking the same question - What is the value of my home? Lorna Calder of RE/MAX Associates Northeast says that this is probably the number 1 question a homeowner will ask. Most homeowners are not sure how to determine the value in a changing real estate market.
Being informed and know what your home will sell for today will should be the first step in preparing to sell your home. A home is worth what someone will pay for it, and what someone will sell it for - this is 'Market Value'. 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 licensed / certified appraiser's opinion of value and is an estimate based on amenities, energy efficiency, and the quality of the of the value of a home at a given point in time. To make their determination, appraisers consider recent sold comparables, 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.
The list price is the price tag put on a house in a real estate listing; it usually is only an estimate of what the seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions such as location and condition.
A seller may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.
The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors. Lenders require appraisals as part of the loan application process; fees can range from $200 to $375. Appraisers use several factors when estimating value including historical records, property performance, condition of the home and indices that forecast future value.
Market value is what price the house will bring at a given point in time and is defined as the amount that a willing seller will sell the property for, and the amount a willing buyer will pay - a meeting of the minds so to speak. 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. Because brokers and agents are not state-certified appraisers, they may not perform appraisals in most states. Instead, they estimate the value of a property using a CMA.
In some states 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's or assessor's offices, through private companies or on the Internet. Texas is a "non-disclosure" state, this means that real property sales prices are not a matter of public record. Sold comparable information can be obtained by your real estate agent through the CMA process or through tools provided by real estate agents like Market Snapshot. Neither of these services produce official appraisals. They also don't factor in market nuances or other issues a certified appraiser or real estate professional might in assessing the value of your home.