Appraisals Vs Market Value
What is the market value of my home?
Market value is an estimate of a homes worth based on a number of factors at a given point in time. In an industry such as real estate where home values can ebb and flow like the ocean it can be challenging to determine the current value of your home. Homeowners have two common ways to determine their home’s value. The first is requesting a comparative market analysis be performed by a licensed real estate broker. These are offered at no cost by most brokers and can be completed in about a day. The second is an appraisal which is performed by a licensed appraiser and can run around $500.00 and up and tend to take a week or two.
Comparative Market Analysis
A comparative market analysis or CMA, is when we use similar homes in a close radius that have sold recently to determine how much homes are going for in an area. Most home owners turn to a CMA before listing their home for sale. Some of the factors we take into account are square footage, lot size, number of bedrooms and bathrooms, neighborhood or subdivision, and of course any recent upgrades or additions.When needed brokers will make adjustments to ensure the best accuracy.
Appraisals are a formal estimate of a property's market value, based on several factors, including the home's size and square footage, the condition of the home and neighborhood, comparable local sales, any pertinent historical information, sales performance, and forecast future value. Formal appraisals are required for most purchases being financed however there are cases where the appraisal can be waived.
Ultimately a home is worth what someone is willing to pay for it. When there are not many homes available some buyers are willing to pay over appraised value. However, when there are a lot of homes on the market but not very many buyers, then homes tend to sell for less than appraised value.
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