“What is my home worth” is probably the single most popular question asked when someone decides to put their home on the market.
In real estate, finding out how much your home is worth is done through an appraisal, which determines the value of your house in the present day market.
There are several factors taken into account when valuing a home….
The first is reproduction cost. Essentially, this is when the appraiser evaluates the current condition of your home to determine how much it would cost to reproduce or replicate the home given today’s market conditions. Appraisers take many things into account including workmanship and material costs.
The second most common type of appraisal is the sales comparison approach. To come up with the market value of your home, the appraiser will measure the exterior walls to determine square footage of the heated and cooled portions of your home. Homes with a finished area (heated or cooled) in the basement or homes with a second floor will be measured from the inside. Next, the appraiser will take a tour through your home, making note of all the amenities including fireplaces, insulated windows, garages, pools, and porches or decks.
Next, they will find at least three comparable properties in your neighborhood that have sold within the past six to 12 months. Comparable means they are similar in age, size, design, construction quality, and amenities. Rarely do the homes match up perfectly, so the appraiser takes this into account, making adjustments along the way. There is a limit to the number of adjustments an appraiser can make, which is why the appraiser will search in the next closest neighborhood if there aren’t any homes that are comparable in your neighborhood.
Once the appraiser has made all the adjustments, they weigh the differences in each property versus the soon-to-be listed home and determine a fair market value.
Sometimes there is debate between the seller, the agent, and an appraiser as to the market value of the home. What is important to note is that price and value are not the same. Your real estate agent’s job is to take the appraiser’s information and determine a range of value that will sell the home in the right time frame.
It is important to price the home right from the start. Motivated buyers will always choose the home that has the best price for the amount of home. If there are two comparable homes on the market, they want more features for the same price, or a lower price for the same features. The home that is priced competitively from the beginning will always sell the fastest.
Want to know what your home is worth in today’s market? Give Dionne McCarthy at McCarthy Appraisal services a call, and she’ll start the Comparative Market Analysis process. (970) 217-8775 or use our contact form
Dionne McCarthy is a certified real estate specialist for residential Appraisals in Fort Collins, home appraisals in Loveland, real estate appraisals in Windsor, home appraisals in Greeley, house appraisals in Wellington, real estate appraisals in Longmont and residential appraisals in Larimer and Weld Counties