It can be hard to place a monetary value on something that carries sentimental value.
But when you go to sell your home and find yourself tasked with pricing the place you hold so dear, how do you do it right?
As Gregory Barr, chief appraiser for Graham Appraisal in Glasgow, Kentucky, explains, all too often homeowners expect a higher appraisal value for their home when they put it on the market. “When we come by, everyone thinks their house is worth a lot more. When the tax assessor comes by, it’s worth a lot less,” he says.
At the end of the day, your home is worth as much as someone else will pay for it – and it’s an appraiser’s job to estimate what that value could be. “The market value is what a prospective buyer is willing to pay for the subject property,” explains Kelly Kellogg, owner of Appraisal Experts Inc. in the Orlando, Florida area and author of “ABCs of a CMA,” which provides real estate agents with a breakdown of comparative market analysis to price and sell properties.
An appraisal can be used at different stages of the home selling or buying process by the buyer, seller or lender to determine the market value of a home. The appraisal process is often helpful for owners preparing to put their home on the market and especially when a seller and real estate agent have trouble agreeing on an initial asking price.
If you’re told your home is worth less than what you thought it was, what could be the cause? Appraisers weigh in on some of the major factors that could be dragging down the value of your home.
Your home doesn’t compare to that house down the street. Appraisers use recent transactions of similar homes in the area to assess your home’s potential value – but the houses must have the same amenities, features and condition to be truly comparable.
According to Carole Christensen, owner of Appraisal Minnesota is Northfield, Minnesota, homeowners are often confused when they receive an appraisal value lower than expected, and argue the neighbor’s house down the street sold for X more dollars. “Well, [your] neighbor’s house has a brand new kitchen and baths and is 30 percent larger than your house and is a different design,” Christensen says.
The number of bedrooms, in particular, is a key factor in selecting comparable sales. Kellogg says appraisers aim to compare prices of homes with the same number of bedrooms because the detail changes what the potential buyer is willing to pay. More here.