Q & A: Appraisals & Market Value
Click a question to jump right to the answer:
- How do you increase the value of your property?
- How is a home’s value determined?
- What is the difference between market value and appraised value?
- What standards do appraisers use to estimate the value of a home?
How do you increase the value of your property?
There are many factors that influence the value of a home. Often the biggest factor – the current real estate market – is out of your control. But, there are other aspects that you are able to control, and thus increase your home’s overall value. Some common improvements are: landscaping, new paint (interior and exterior), new windows, roof, updated appliances, renovated kitchen and bathrooms and new wood floors and carpeting. One thing to keep in mind when updating your home is to be careful not to price yourself out of your neighborhood. For example, if the average home in your neighborhood sells for $750,000, you do not want to add upgrades to your home that would price it at $950,000. Another great way to improve the value of your home is to improve your neighborhood – a tidy next door neighbor, keeping the neighborhood clean or landscaping the local park are all improvements that can add value to your home’s worth. Staging your house before listing it has also proven to increase its value to buyers.
How is a home’s value determined?
A home’s value can be determined using multiple techniques.
– CMA: Prior to listing your home, the Magnificent Manors Team will perform a Comparative Market Analysis (CMA) which estimates the value of your home based on recent sales of similar homes in your area. The CMA makes allowances for the many differences among those homes and yours.
– Appraisal: Lenders require that an appraisal be performed prior to closing to ensure the home’s value is not less than the loan amount. Appraisers also base their estimates on prior sales in the area, square footage, location, and home features and upgrades.
– Assessment: Assessments are periodically performed on homes by local governments to evaluate the home’s property taxes. Since property taxes are based on property value, features such as location, size of lot, age of home, and home condition are factored into the assessment. The assessment provides important data to consider when conducing the CMA.
What is the difference between market value and appraised value?
The market value of a home is the estimated price at which the home would currently sell. To obtain the market value of a home, your Magnificent Manors Team will perform a Comparative Market Analysis (CMA) which will estimate the value of your house based on recent sales of similar homes in the area. The appraised value of a home is the worth a professional appraiser estimated for the home. Lenders often require an appraisal prior to closing to ensure the home’s value is not less than the loan amount.
What standards do appraisers use to estimate the value of a home?
Appraisers base their estimates on several factors such as prior sales in the area, square footage, location, home features and upgrades. A copy of a home’s appraisal detailing the standards the appraiser used to reach his or her estimate will be provided to the buyer’s lender after the appraisal has been completed.