Selling Your Home - Appraisals & Market Value

What 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 range from $250 - $700. The typical "lender" required appraisal will cost $700+ which is payable to your loan mortgage lending institution upon order placement. As a seller, you may want an appraisal prior to meeting with a Broker.  In this case, the appraisal may cost at the lower end of the range. 

Market value is what price the house will bring at a given point in time. Appraisals look at "sold" homes that have sold in the last 180 days or less.  A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real state broker. As a Managing Broker, I work "in" the market.  I am familiar with the comparable homes that are both for sale and pending a sale.  I'm in touch with the "beat" of the market, therefore, often resulting in a more accurate "fair market" valuation based on market trends and conditions. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

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.  I offer annual Real Estate Reviews for my clients and  thorough complimentary price analysis (comparative market analysis) for customers who are considering selling their home.    

How is a home's value determined?
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.   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 or find comparable sales information available on various real estate Internet sites.

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).