Many
homeowners ask the question: What is the value of
my home? Some
sellers will base their home value on price per square foot. Others will
take the price they paid for the home, add the amount that they put in to
repairs, and then add their estimate of appreciation to get the number.
Some will simply guess at the value.
However,
these methods will not actually help you find the answer to the question: What
is the value of my home?
First,
we should start by defining what “value” really means. In the real estate
world, value is defined as “The most probable price that a property would sell
for in a competitive and open market.” Unfortunately, sellers can be
unrealistic about their homes value. Sellers often use emotion rather than
current market statistics when asking themselves: What is the value of my home?
Lenders,
mortgage companies and financial institutions all have a generally accepted
method to determining a home’s value: the appraisal. An appraisal
is an estimate of value as determined by a licensed appraiser. Before a
lender will loan money to a buyer for a property, they want to make sure that
the property is worth the amount they are lending.
So
the BIG question is: how does an appraiser perform the appraisal?
An
appraiser will first visit the subject property to see what condition the home
is in. They will then search for similar properties (comparables) that:
1) Have sold within the
previous six months.
2 ) Are within a quarter
mile of the subject property.
3) Have similar
amenities such as bedrooms, bathrooms and square footage.
After
gathering this data, the appraiser will then choose the best comparables (homes
most similar to subject property) to determine the most probable market value
of the home. This process takes knowledge of the local real estate market,
along with expertise of on-going trends in the immediate region.
{If you'd like to speak to a real estate professional about finding the value of your home, call me at (253) 508-6991 or email me at johnbryson.kw@gmail.com.}
{If you'd like to speak to a real estate professional about finding the value of your home, call me at (253) 508-6991 or email me at johnbryson.kw@gmail.com.}
When
a seller asks a real estate agent “What is the value of my home?” it is in the
agent’s best interest to try to replicate an appraiser’s method as closely as
possible. Using the 3 criteria listed above, a knowledgeable real estate agent
can come amazingly close to answering the age old question: What is the value
of my home?
