Q & A: Appraisals & Market Value
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 can get a comparable sales report for a fee from private companies that specialize in real estate data. You can also find comparable sales information available on various real estate Internet sites.
What is the difference between market value and appraised value?
Appraised value 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.
What's a house worth?
A home 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 the amenities, improvements, and the land at the current time. To make their determination, appraisers consider location, square footage, construction quality, design, floor plan, neighbourhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account.
A comparative market analysis is an informal estimate of market value, by a real estate agent or broker, based on those same criteria, plus comparable sales in your neighborhood. 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. For a Free, No obligation On-Line Market Evaluation
What standards do appraisers use to estimate value?
Appraisers use several factors when estimating value including historical records, property performance, condition of the home and indices that forecast future value. For detailed information on appraisal standards,
Appraisal Institute of Canada, National Office
1111 Portage Ave.
Toll Free: 1-800-441-8062
Appraisal Institute of America
550 W. Van Buren St, Suite 1000
Chicago, IL 60607
Fax: (312) 335-4400
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