If you want to sell your vehicle, you can go to a “blue book” and quickly determine its worth. But if you want to find out what your home is worth, you have to get an appraisal. Wouldn’t it be nice if there was a “blue book” for homes?
The good news is that is that it’s easy to get a home appraisal. Most real estate agents have been trained to do a Comparative Market Analyses or CMA. Just like “blue book values” for vehicles, CMA’s base a home’s fair market value on recent sales information with adjustments for a property’s individual characteristics and condition. And CMA’s prepared by most realtors are free!
There are more detailed appraisals prepared by certified appraisers that are prepared with additional precision. They also have a perceived objectivity. Certified appraisals are typically required by lenders while compiling support for a home loan approval. The cost of a certified appraisal can run into the hundreds of dollars. And most times, certified appraisals are very close to one prepared by a qualified, experienced realtor.
So what are some of the factors that make your home worth more or less that another? Here are just a few:
1. The primary difference is always size of the home. When you sell your home, you are primarily selling square footage. So the more you have, the more you’re going to get.
2. Another major difference is location. As we all know, homes in Montgomery County, TX cost less than homes in Los Angeles, Ca.
Size and type of lot. A large, shady waterfront lot is on one extreme while a small, interior, barren lot is on the other.
3. Condition of home. A rotting front porch, dated wall paper and poor curb appeal are all items that some buyers just can’t look past.
4. Neighborhood amenities. A gated community, golf course, playground, and swimming pool are just a few things that attract buyers to certain communities.
5. Energy efficiency. Especially with oil prices hovering over $100 / bbl, low-e double paned windows, thick insulation, radiant barrier decking, tankless water heaters and fluorescent lighting increase the attractiveness of a home.
6. Outbuildings. Yes, you do get credit for that 40x50 air-conditioned workshop. Might not be as much as you want, but you do get credit.
When you first contact a Realtor about an appraisal, you will be asked about many of the above items. Then, prior to touring your home, the Realtor should have done a Comparative Market Analysis that takes those relevant items into consideration. By reviewing all recent sales of similar homes, the Realtor has determined the low, average and top range of those homes. He/she will then make adjustments to put yours on a comparable basis. This will provide a framework to use prior to making final adjustments after the home is toured. After all, some homes have a certain charm or allure that is hard to define, but certainly adds value. So the realtor is hard pressed to make a final recommendation until he/she has seen the unique characteristics of your home.
But keep in mind that all appraisals, whether CMA’s or certified appraisals, are only estimates. Real estate markets are dynamic and supply/demand can change rapidly. At the end of the day, a property’s value is determined by the highest offer a qualified buyer is willing to make.
If you are interested in selling your home, please feel free to contact me at Claudia@ClaudiaHohlt.com or call me at 936-537-1656. All CMA’s are done on a confidential basis. And as I mentioned above, it’s free with no obligation. For more real estate information, logon to http://www.claudiahohlt.com.