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Frequently
Asked Questions
Selling
Your Home - Q & A
Appraisals & Market Value
Q:
How is a home's value determined?
A:
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 also can
get a comparable sales report for a fee from private companies
that specialize in real estate data. You also can find comparable
sales information available on various real estate Internet sites.
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.
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.
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.
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 of market value, based
on comparable sales in the neighborhood, performed by a real estate
agent or broker. 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.
Other resources
include:
- The Home
Sales Line allows people to use their telephones to find the
exact selling price of houses anywhere in the state 24 hours
a day. Call 1-800-585-HOME.
- Dataquick
Information Systems tracks home sales statewide and prepares
reports for specific properties. Call 1-800-999-0152.
- Go to Web
sites such as http://www.homeshark.com and http://www.dataquick.com.
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.
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