Determining A Home's Value

Figuring out a home's market value takes a little research. One first needs to investigate similar homes in your neighborhood that have sold recently and what they sold for. You also need to compare the details of those homes to the one you want to buy or sell, and see how they differ. There will be details in each house that make it more or less valuable. Keep all features in mind when you try to determine the difference in value, so you can make a clear judgment on the value of your home. The price you set should be honestly reflect what you fell is the true worth of your home, regardless of how you feel about the house or how much money has been put into it.

There is a difference between an appraisal and a comparative market analysis. An appraisal is a certified appraiser's estimate of the value of your home. The appraiser takes in to consideration your homes square footage, neighborhood, lot size, and construction quality to name a few. A comparative market analysis is more of an informal estimate of your home's market value. A real estate agent will make an estimate based on comparable home sales in your neighborhood. A competitive market analysis, also referred to as a CMA, can be obtained at no cost, where an appraisal will cost several hundred dollars.

While a home's estimated value is most commonly determined by either an appraisal or a comparative market analysis, what prospective buyers are willing to pay for it determines its worth. Most people do not order appraisals to determine the asking price for their home. The seller and real estate agent agree upon the purchase price at which they will sell the home. The real estate agent will normally perform a comparative market analysis to help determine that price. The reliability of the CMA depends upon the agent's experience and the individuality of the property. The agent will suggest a selling price to the seller based upon the analysis. The figure that the agent comes up with is not necessarily what the asking price will be. A seller can list his home at any price regardless of what anyone has suggested that the value be.

Melissa Steele
SmartLending.com Writer