Appraisals
& Market Value - Q & A
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Q:
What
is the difference between market value and appraised value? A:
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. In Connecticut, all appraisers are
licensed as well as certified. 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. It is also commonly known as a Broker's Price Opinion. (B.P.O.) Q:
How
do you find out the value of a troubled property? A:
Buyers
considering a foreclosure property should obtain as much information as
possible from the lender about the range of bids being sought. 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. You should make yourself familiar with the bidding procedures. This is important in understanding the commitment that you are entering into if your are the successful bidder. Lastly, you should never overbid. Do not get caught up in the passion of the moment and pay more than either the property is worth or what you were willing to pay for. Q:
What
are the standard ways of finding out what a house is valued at? A:
A
comparative market analysis or B.P.O. and an appraisal are the standard
ways consumers, lenders and realty agents determine what a home is worth. Your
real estate agent will be happy to provide a comparative market analysis
or more commonly referred to as a "C.M.A. ", an informal
estimate of value based on comparable sales in the neighborhood. You also
can research "the comps" 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 cost $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. As stated earlier, an appraiser
is licensed as well in the State of Connecticut. Q:
What's
a house worth? A:
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 ( C.M.A.). An
appraisal is a certified appraiser's estimate amenities, energy
efficiency, the quality of the of the value of a home at a given point in
time. To make their determination, 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. A
comparative market analysis is an informal estimate or opinion of market
value, based on comparable sales in the neighborhood, performed by a real
estate broker or agent. 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. Q:
What
standards do appraisers use to estimate value? A:
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, contact the
Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL
60611-1980; (312) 335-4458. Q:
What
is the return on new versus previously owned homes? A:
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 3 percent between 1994 and 1995, compared
to 0.8 percent for new homes in the same period. Q:
What
is the difference between list price, sales price and appraised value? A:
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.
A Realtor acting as your Buyer Agent will be able to provide that
information to you. The
sales price is the amount of money you as a buyer would pay for a
property. It is also the price of the property at closing. The
appraisal value is a certified/licensed (CT.) appraiser's estimate of the
worth of a property, and is based on comparable sales, the condition of
the property and numerous other factors. Q:
Can
I find out the value of my home through the Internet? A:
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. While
some of these services are good. They are not necessarily accurate, and
there is usually a cost. 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. |