Buying Your Home - Appraisals & Market Value
do you find out what a house is worth?
A house ultimately is worth what someone will pay for it. Everything else is an estimate of value. Appraisals and comparative market analysis reports are the most accurate ways to estimate the value of a house.
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 start around $450, and go up based on the size of the home. Appraisers have standards they use to estimate the value of a property. They consider numerous factors including the home's size, number of bedrooms & baths, square footage, the quality of construction, condition of the home and neighborhood, comparable local sales, upgrades, availability of transportation, shopping and schools, along with lot size, topography, view and landscaping. They take into account any pertinent historical information, sales performance and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458. Market value is the price a house would sell for at a given point in time. A comparative market analysis is an informal estimate of market value based on comparable properties, prepared by a real estate agent or broker. They also take into account the location desirability & convenience, square footage, number of bedrooms & baths, age & condition of the home, improvements and amenities. Be sure you get listing prices of current homes on the market as well as those that have sold. Most real estate agents would be happy to provide you with a free market analysis.
I find out the value of a home through the Internet?
You can research property values yourself by checking recent sales in the 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. You can get some idea of a 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. Neither of these services produce an official appraisal. 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. You need to be aware that some web sites have old, therefore inaccurate information when it comes to determining current values.
do you determine the value of a distressed property?
Buyers considering a foreclosured property should obtain as much information as possible from the lender. It also is extremely important to examine the condition of the property. If you are unable to get inside a foreclosured property, check with surrounding neighbors about the property's condition. You will also want to do a cost comparison through researching sales of comparable properties at local county recorder's or assessor's offices, through Internet sites specializing in property records, and/or with a real estate agent.
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 increased 4.3 percent between 1999 and 2000, compared to 2.8 percent for new homes in the same period.