Buying Your Home- Appraisals & Market Value |
What is the return on new versus
previously owned homes?
Buying into a new-home community may
seem riskier than purchasing a house in an established neighborhood, but any
increase in home value depends upon the same factors: quality of the
neighborhood, growth in the local housing market and the state of the overall
economy. One survey by the National Association of Realtors shows that
resale homes do have an edge over new homes. The trade group's figures show the
median price of resale homes increased4.3 percent between 1999 and 2000,
compared to 2.8 percent for new homes in the same period.
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.
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 200 W. Madison, Suite 1500, Chicago, IL 60606, 7 a.m. - 5 p.m. CT;
888-7JOINAI (756-4624).
Can I find out the value of my home through the Internet?
You can get some idea of your home's
value by searching the Internet. A number of Web sites and services crunch the
numbers from historic public records of home sales to produce the statistics.
Some services offer an actual estimate of value based on acceptable software
appraisal standards. They also depend on historic home sales records to
calculate the estimate. 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.
What is the difference between list price, sales price and appraised value?
The list price is a seller's advertised
price, a figure that usually is only a rough estimate of what the seller wants
to get. Sellers can price high, low or close to what they hope to get. To judge
whether the list price is a fair one, be sure to consult comparable sales
prices in the area. The sales price is the amount of money you as a buyer would
pay for a property. 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.
What are the standard ways of finding out how much a home is worth?
A comparative market analysis and an
appraisal are the standard methods for determining a home's value. Your real
estate agent will be happy to provide a comparative market analysis, an
informal estimate of value based on comparable sales in the neighborhood. Be
sure you get listing prices of current homes on the market as well as those
that have sold. You also can research this yourself by checking on recent sales
in public records. Be sure that you are researching properties that are similar
in size, construction and location. This information is not only available at
your local recorder's or assessor's office but also through private companies
and on the Internet. An appraisal, which generally costs $200 to $300 to
perform, 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.
How do you determine the value of a troubled property?
Buyers considering a foreclosure
property should obtain as much information as possible from the lender,
including the range of bids expected. It also is important to examine the
property. If you are unable to get into a foreclosure property, check with
surrounding neighbors about the property's condition. It also is possible to do
your own cost comparison through researching comparable properties recorded at
local county recorder's and assessor's offices, or through Internet sites
specializing in property records.
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.