Who Determines the Value of Your Home?

 
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It's the job of the real estate appraiser. His or her job is to evaluate a property and tell you, the buyer, what condition it is in and the value. Of course, as a seller, you can also have your home appraised so you get an objective "third party" view of your property.

Real estate appraisers are licensed by the state. Regulations vary, however, so I recommend you contact either me or a bank for information on qualified and ethical appraisers (more on this later). Often, they are independent contractors associated with appraisal firms headed by a Certified Appraiser or the equivalent.

What are the Benefits of Using an Appraiser's Services?

When you are a buyer, appraisers can provide you with two great benefits:

 
First of all, they can uncover hidden problems that could end up costing you a lot of money down the line. Their appraisal can help you to either avoid the property all together or negotiate a lower price to compensate for future costs.

Second, appraisers can do the opposite -- uncover hidden opportunities for you! For example, you might be considering a home that doesn't look all that wonderful on the outside, but is actually in solid shape as far as its structure is concerned. So, through an appraiser's efforts, you may end up with an outstanding bargain.

From the seller's viewpoint... an appraisal can uncover items that need to be fixed before you put your home on the market. This ensures that your property is in the best shape possible before prospective buyers ever look at it.

What Kind of Report Will I Receive from an Appraiser?

A certified appraiser should provide you with a written report. These reports generally consist of the following nine items:

1. A description of the property and its location based on a visit to the property by the appraiser. The appraiser evaluates the condition, overall livability based on design, layout, and appeal to the market, and other external factors).

2. An evaluation of the “highest and best use” of the land; that is, the use for a piece of land, or property in general, that maximizes its net present value.

3. An evaluation of sales of comparable properties (usually three) as similar to the appraised property as possible.

4. Information regarding current real estate activity and/or market area trends.

5. An evaluation of the overall real estate market in the area.

6. Statements about items the appraiser feels are detrimental to the property's value, such as poor access to the property.

7. Notations about seriously flawed items, such as a crumbling foundation, leaking roof, etc.

8. An estimate of the average sales time for the property.

9. What type of area the home is in (a development, stand alone acreage, etc.).

How Do I Find a Certified Real Estate Appraiser?

I can direct you to very qualified appraisers, or you can find one through your bank, as it too should have a list of approved appraisers. If you decide to find an appraiser on your own, check his or her background carefully. As with any profession, there are always a few scam artists who inflate appraisal amounts in order to make more money.

Check with the Better Business Bureau and the State Appraisal Board. You can also check with your bank to make sure an appraiser is not blacklisted.

How Much Does An Appraisal Cost?

Generally speaking, an appraisal runs from $300 to $500. However, fees do vary with location.

If you need more information on real estate appraisers or any other real estate topic, be sure to call me.  I would love to discuss these matters with you!

What Determines the Value of Your Home?

 

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Basically, a home's worth is determined by its market value. How is "market value" determined? Most often, it's figured by a comparison ("comp") with homes similar to yours in the surrounding area. So, if the homes in your neighborhood average, say, $250,000, then it's likely that the value of your property will fall in the same range. But market value is also determined by a number of factors including the following:

External Factors 

There can be several external factors influencing the value of your home. One is "curb appeal", or the first impression your property makes upon prospective buyers. A home that's in excellent condition on the outside will make a great first impression; a home in poor repair instantly loses its appeal to buyers. Other factors can include lot size, popularity of an architectural style of property, water/sewage systems, paved roads, sidewalks, etc.

Internal Factors  

The condition of a home's interior also has a huge influence on prospective buyers. When you've demonstrated "pride of ownership" and kept up the maintenance (quality paint, trim, molding, etc.), a buyer's interest will immediately perk up for the simple reason that they know your care and concern will result in less cost and maintenance for them. Other internal factors include construction quality, condition of appliances, size and number of rooms, heating/cooling type, energy efficiency, etc. 

Supply and Demand 

"Supply and demand" simply refers to the number of homes for sale versus the number of buyers. When there are more homes than there are buyers, prices tend to be lower. When there are a lot of buyers chasing few homes, then prices tend to rise. In effect, supply and demand affects how quickly your home will sell. Location More than likely, you already know the old saying, "There are three main factors in real estate - location, location, location." While that's not the whole story, desirability is a big factor for home buyers. They may want to live in particular school district known for its education excellence…a great and safe neighborhood with rising property values…etc. 

But I Know My Home Is More Valuable Than a Lot of Comparable Homes in My Neighborhood  

Aren't Allowances Made for This? Definitely! Sometimes, it can be difficult to find homes exactly comparable to your own. So, dollar adjustments are made for the differences between your home and comparable properties. 

Where Do I Find Sales Comparison Information? 

The easiest source to access is your Realtor. After all, it's his or her business to know such information! But, there are also other sources you can tap into in order to get a complete picture of your home's value in comparison to others in your neighborhood. Here's an overview of them:

1. ) The Local Assessor's Office  

It's very likely that your local assessor will be able to provide the sales history of a particular house, neighborhood, or style of architecture. Many assessors also provide lists of recent sales which you can browse and compare to the assessment roll. Today, many municipalities provide local sales and assessment information online making it very easy to access. Check with your local government agency to find out if they provide this service. 

2.) Online Private Companies  

You can search for these companies using the Google search engine and the keywords "comparable home sales" or "comparable sales." Some companies offer free information; others charge a nominal fee. If you wish to get more specific, you can Google "real estate database" and type in the name of your particular state to get additional property information. 

3.) Your Local Newspaper  

It's likely that your local newspaper is a great source of specific real estate information. Look for quarterly sales reports in the real estate or business sections.

The Key to Getting the Price You Want (or Close To It) for Your Home 

The key to getting the best value is finding and matching the right buyer to your home. And that's the job of the Realtor! He or she should work hard to qualify those buyers upfront so the right people are viewing your property! In other words, the Realtor should weed out "lookers" and other unsuitable buyers as a first step in working with you. See how I do that for you by calling me today!