Buying Your Home - Appraisals & Market Value
What is the difference between list price, sales price and appraised value?
The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area. The sales price is the amount of money you as a buyer would pay for a property. The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
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. Most appraisals cost about $400-750.
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. The appraisal is clearly marked as being the opinion of value for that specific day, and of course the value can change as market conditions do.
Do I need an appraisal?
Yes and no -- Don't you love mixed answers? In short, you do not need a formal appraisal unless or until the bank requires one. And while a buyer pays for an appraisal, the appraiser is working for the bank. The bank hires the appraiser in order to ensure that the property you want to purchase is worth, to others, the price you have offered to pay.
If you are buying a property with cash, however, it is entirely your choice whether or not to make an appraisal one of the contingencies of the sale.
What can Kristen do for me?
I can prepare a market analysis for you at any time for a property that you are interested in purchasing. A comparative market analysis is a real estate broker's informal estimate of a home's market value, based on sales of comparable homes in a neighborhood. It uses some of the same data that an appraiser would, but from a different perspective. I have had specialized, additional training to sharpen my skills at preparing market analysis, and have earned a PSA Designation for that additional training. I will prepare a comparative market analysis for free, just give me a call at 541-441-5999.
What About Zillow?
Of course, you can always get a Zesstimate -- and we can laugh and laugh. Zillow publishes regular statistics on the accuracy of their data, and they are upfront about the (low) quality of their Zesstimates. So feel free to pull together a Zesstimate, then meet me for a real market analysis.