A house appraisal is an opinion of value, an estimate of worth. The value of residential real estate is estimated by comparing the subject house with similar properties that have been sold recently. Look at your neighborhood to find comparable sales or properties in similar neighborhoods that share similar characteristics of lifestyles, income level of residents, surroundings, average age and value of houses.
Neighborhoods have boundaries and barriers to the best neighborhood which may signal an abrupt change in lifestyle, highways, major traffic arteries, rivers, mountains, etc. In your neighborhood analysis, you may consider recreational facilities common to your situation. The focus is to find comparable homes in similar neighborhoods for your analysis.
Because properties are seldom alike, it will be necessary to make adjustments between the comparable properties as compared to the subject property (your property). This process equalizes the properties in the comparison.
If a comparable sale property has a major improvement that your property does not have, make a minus adjustment. On the other hand, if you enjoy a major improvement and the comparative sale property does not, make a positive adjustment. Round off adjustments to the nearest $100.
There are four basic phases involved in this house appraisal approach:
- Recording and analyzing data from your property and potential comparable properties.
- Selecting the appropriate comparable data.
- Developing reasonable adjustments based on market data.
- Applying your findings to the subject (your property).
Concentrate on finding comparable sales that have characteristics similar to those of your own home. A variety of these parameters are listed below in descending rank of importance, the first listed being more important than the last listed.
Categories of Appraisal Compatibility:
- Similar neighborhood
- Total square feet of living space
- Number of rooms, bedrooms, baths (Sold preferably within 4 months)
- Sales price within general market price of your home
- Sales or financing concessions
- Quality of construction
- Style of house
- Age of house
- Square footage
- Property site and view
- Functional utility (deficiencies or overbuilt features)
- Number of garages
- Remodeled kitchen, kitchen equipment, etc.
- Window type
If you don’t want to do it yourself, spending money for a qualified house appraiser to determine an accurate and current value for your home is a small price to pay considering the overall picture. You’ll get a figure to hang your hat on and piece of mind that you are offering or buying the home at a fair price.
Finding that right price is offered free of charge by real estate professionals. It’s not a bona fide, time-consuming appraisal, but rather a “ball park figure.” They refer to it as a comprehensive market analysis (CMA). But finding the best, honest, hardworking top producing agent is not easy.
Only 30% of the homes sell within a 3-month period under average market conditions. Because of competitive market conditions, pricing your home a few thousand dollars off the mark can affect its saleability. The typical buyer will look at the lowest priced homes first.
A “too-high” price discourages the knowledgeable agent from showing your home since he also knows that most buyers are knowledgeable and don’t want to waste their time looking at an overpriced house. Showings are reduced and offers are minimized. Some say 80% of the marketing is in pricing your home right.
The more home showings you can get, the better the chance you have to sell your home. Often the first offer is the best offer. The reason the gurus give is that your home is new to the market and a certain excitement exists, since the “newness” polish hasn’t worn off.