Buying Your Home - Appraisals & Market Value

What's a house worth?
A home ultimately 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 a home at a given point in time. 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. Most appraisals cost about $400.  If you will be obtaining financing, your lender will require a certified appraisal.  

A comparative market analysis (CMA)is a real estate broker's or agent's informal estimate of a home's market value, based on sales of comparable homes in a neighborhood. Most agents will give you a comparative market analysis for free.  A CMA will include comparable information on sold properties as well as currently listed properties. 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 or assessor offices.  You can search the McWaters & Associates REALTORS Website for both active and sold listing information.

What standards do appraisers use to estimate value?
Appraisers use several factors when estimating a home's value, 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 indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 200 W. Madison, Suite 1500, Chicago, IL 60606, 7 a.m. - 5 p.m. CT; 888-7JOINAI (754-4624).

Can I find out the value of my home through the Internet?
The most reliable data to estimate your home's value comes from your local Multiple Listing Service and your local Tax Assessor's website.  All other websites pull information from these sources.  Many popular Real Estate sites report information that is expired and inaccurate. Contact a Realtor to gain access to your local Multiple Listing Service or use The McWaters & Associates REALTORS Website to search active and sold listings in your neighborhood.

What is the difference between list price, sales price and appraised value?
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. The sales price is the amount of money you as a buyer would pay for a property. The appraised value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.

What are the standard ways of finding out how much a home is worth?
A comparative market analysis and an appraisal are the standard methods for determining a home's value. Your real estate agent will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the neighborhood. Be sure you get listing prices of current homes on the market as well as those that have sold. You also can research this yourself by checking on recent sales in public records and the McWaters & Associates REALTORS Website Be sure that you are researching properties that are similar in size, construction and location.  An appraisal, which generally costs $350 to $400 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.