Sell A Home - Articles And Tips

How much is my home worth and do I need an appraisal?

No - A formal appraisal is required by the lender of the buyer of your home, prior to closing, the buyer pays for this.

A real estate agent from GayRealEstate.com can provide a "Free Competitive Market Analysis" which will help determine the proper listing price, and potential selling price.

Determining your home’s value is an integral part of financing your home, new home or mortgage. The average person will appraise the value of their home several times throughout the period they posses it.

Appraisal determines the value of a home by arriving at a price consensus drawn from a composite of factors. This consensus serves as the foundation, the ‘right price,’ from which banks, real estate agents, homebuyers and sellers can begin to negotiate. Because a handful of people and a large amount of money are involved during the home buying process, convention often designates a professional appraiser be called in as an impartial official.  

To start, be your own appraiser

You are not required to hire an appraiser. If you are in the market to sell, you don’t technically need an appraiser to begin evaluating the cost of your home. You can roughly determine the worth of your home by applying many of the same methods an appraiser or real estate agent might. It is best to keep in mind that your home’s value isn’t fixed, but fluid, and relevant to a multitude of factors, like what your community offers and what prices the houses around you are getting in a sale.

There are industry standards for valuing your home. To start, you may want to have a look at what the county values your home at. There should be a record of this. After that, check out what similar homes in your neighborhood are going for.

Real estate agents often use something called a CMA—a comparative market analysis. It similar in design to a professional appraiser’s, but narrower in scope. Think of it as a roughly hewn algorithm for shaping and determining value. The CMA might be broken down into three general unofficial categories of criterion:

1. What do the house and the property have or contain?

2. It asks, ‘what are similar properties in the neighborhood going for (in the past 3-6 months)?’

3. What does the neighborhood offer? Good schools? Nice parks? Even things like street lamps and sidewalks count.

Again, these are general places to start estimating value. Your real estate agent will have his or her own methodology for estimating value. But you can begin to do your homework ahead of time by scouring the neighborhood and the local county records, and then do a ballpark assessment.

How does a professional appraiser calculate the value of a home?

Once an appraiser gets involved, it quickly becomes more complicated.  

Appraisers use two time-tested, impartial methods to determine the value of a house. The first is the replacement cost method and the second is the comparison method.

The replacement cost method is and does what it sounds like. Appraisers have access to trade catalogues that can accurately give them an average price to replace a square foot of house based on material and labor costs.  

Appraisers will also calculate in general amenities, the interior features of the house, additional features of the house and home improvements. They will make a note of the condition of these facilities.  

They will also determine an “age” of the house based on home improvements. If the house is 60 years old, but has had significant structural repairs and cosmetic refurbishment, they may determine it is effectively 25 years old.

Appraiser methods razor sharp

Appraiser’s methods enter the realm of mathematics beyond this point.  They have standard evaluation procedures and formulas that add or subtract value when they begin a comparison. These comparative analytics are not so different from the ones real estate agents use, but they lend the precision of averages and statistics to the comparison.

Everything is relative for home value

It is important to remember the real value of your home grows from composite of factors. Some appraisal websites offer programs that are built on sophisticated mathematical algorithms. These algorithms take into account the interrelationships between factors, for example, changes in material and labor cost over x-duration of time.

You should be able to get a good picture of home value based on what’s around you. If your house needs some work, like new plumbing, or floors, it may be worth less than your neighbors’ houses. If it is in good shape, you should be able to get a ballpark idea of what it’s worth.

One last note on the value of your home:

Incidentally, the prime rate for mortgages is at an historic low. It might be a good time to have your home appraised and see if you can make a little cash by selling or save a little cash by refinancing.

All the professional real estate agents at GayRealEstate.com provide potential sellers a “Free Comparative Market Analysis”, allowing you to determine if it’s a good time to sell, or not.