What Does Market Value Mean
Market value is an estimate of a homes worth based on a number of factors at a given point in time. In an industry such as real estate where home values can ebb and flow it can be challenging to determine the current value of your home. Homeowners have two common ways to determine their home’s value. The first is requesting a Home Evaluation to be performed by a licensed real estate broker. These are offered at no cost by most brokers and can be completed in about a day. The second is an appraisal which is performed by a licensed appraiser and can run around $700.00 and up and tend to take a week or two.
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HOME EVALUATION
A home evaluation is created by looking at similar homes in a close radius that have recently been sold. Most homeowners turn to a home evaluation prior to listing their home for sale. Some of the factors we consider are things like square footage, lot size, number of bedrooms and bathrooms, location, layout, and of course the condition of the property including any recent upgrades or additions.
vALUE fACTORS
The reason is, if you have a home that has 5 bedrooms, 3 bathrooms, with 4,500 sqft plus a 2,000 sqft finished basement and 3 car garage, would you want it compared to a 3-bedroom, 1 bathroom home on a slab with only 1,100 sqft. Of course not. For location, if your home was in a gated subdivision with community parks and a nice pond, would you want that to be compared to a home that is the same as yours but has a railroad track running through the back yard. Of course not. As for condition, if you have spent the last 5 years updating your home with quartz counters, hardwood flooring, finished basement, put in a nice fiberglass pool, etc; you wouldn't want you home being compared to one that has maybe been vacant for several year and thus is a bit run down in need of work.
This is why it is CRITICAL for a proper home evaluation that we schedule a time to come see the home to ensure we are in fact taking all factors into account.
what is an appraisal
An appraisal, on the other hand, is a formal evaluation of a property's value that is conducted by a licensed appraiser. Unlike a home evaluation, which is based on recent sales of similar properties, an appraisal takes a more comprehensive approach to determining a property's value. The appraiser will consider factors such as the property's size, location, age, condition, and features, as well as the current real estate market conditions and any unique characteristics of the property.
reasons for using an appraisal
Appraisals are typically required by lenders when a buyer is using a mortgage to purchase a property. The lender wants to ensure that the property is worth the amount of money that they are lending to the buyer, and an appraisal helps to provide this assurance. Appraisals can also be useful for homeowners who are looking to refinance their home or for estate planning purposes.
appraisal vs home evaluation
While both home evaluations and appraisals are used to estimate the value of a property, there are some key differences between the two processes. Home evaluations are typically less formal and less expensive than appraisals while still taking in to account all the facts features and market of the home, and they are often done by real estate agents or brokers. Appraisals, on the other hand, are more formal and they are conducted by licensed appraisers who follow specific guidelines and standards required by the buyers lender.