Property Value
Where Can I Find Housing Market Statistics?
A real estate agent is a good source for finding out the status of the local housing market. So is your statewide association of Realtors®, most of which are continuously compiling such statistics from local real estate boards. You can ask one of our agents about market statistics. All Realty of Maine agents are Realtors®.
For overall housing statistics, U.S. Housing Markets regularly publishes quarterly reports on home building and home buying. Your local builders association probably gets this report. If not, the housing research firm is located in Canton, Mich.; call (800) 755-6269 for information; the firm also maintains an Internet site.
Finally, check with the U.S. Bureau of the Census in Washington, D.C.; (301) 495-4700. The Chicago Title company also has published a pamphlet, "Who's Buying Homes in America." Write Chicago Title and Trust Family of Title Insurers, 171 North Clark St., Chicago, IL 60601-3294.
How Is a Home's Value Determined?
There are several ways to determine the value of a home.
Appraisal - An appraisal is a professional estimate of a property's market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house.
Comparative market analysis - A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business.
Fee-based reports - You also can get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.
What Is the Difference Between Market Value and Appraised Value?
The appraised value of a house is a certified appraiser's opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from $200 to $350.
Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.
Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.
What Standards Do Appraisers Use to Estimate Value?
Appraisers use several factors when estimating a home's value, including:
- home size and square footage
- condition of the home
- neighborhood
- comparable local sales
- pertinent historical information
- sales performance
- indices that forecast future value
For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458.
What is 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 $300.
A comparative market analysis is a real estate broker's or agents informal estimate of a home's market value, based on sales of comparable homes in a neighborhood. Most agents will give you a comparative market analysis free.
You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder or assessor offices, through private real estate information companies or on the Internet.
Are There Ways to Determine My Home's Value?
Comparative Market Analysis
A comparative market analysis and an appraisal are the standard methods for determining a home's value. Your real estate agent will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the neighborhood. Be sure you get listing prices of current homes on the market as well as those that have sold. You also can research this yourself by checking on recent sales in public records. Be sure that you are researching properties that are similar in size, construction and location. This information is not only available at your local recorder or assessor's office but also through private companies and on the Internet.
Appraisal
An appraisal, which generally costs $200 to $350 to perform, is a certified appraiser's opinion of the value of a home at any given time. Appraisers review numerous factors including recent comparable sales, location, square footage and construction quality.
Will a Neighbor Problem Reduce My Property Value?
While it may not reduce the actual value, a cluttered landscape next door can detract from the positive aspects of your home. Review your local laws, which should be on file at the public library, county law library or City Hall.
A typical "junk vehicle" ordinance, for example, requires any disabled car to either be enclosed or placed behind a fence. In addition, most cities prohibit parking any vehicle on a city street too long. It also may be worthwhile to check into local zoning ordinances. An operator of a home-based business usually is required to obtain a variance or permanent zoning change in residential areas.
In addition, if a neighbor's repair work produces loud noises, he may be breaking local noise-control ordinances, which are enforced by the police department.
Before bringing in the authorities make a copy of the pertinent ordinance and give it to your neighbor to give them a chance to correct the problem.
How Can I Increase the Value of My Property?
The biggest factors that can affect property value, market conditions, are outside of your control. However, other factors - including the condition of the property, certain home improvements and neighborhood stability and safety - are not.
Home improvements - Specific home improvements can increase your property value above the cost of the improvements themselves, such as remodeling a kitchen, adding a bathroom, finishing a basement or upgrading landscaping. Just be sure that quality pays with remodeling. A bad remodeling job will do little to boost your property value.
Surrounding community - If you live in a high-crime area, an organized community watch program not only will lower the crime rate but can enhance property values, too. It helps to live in an area where other homeowners are upgrading their homes, which can help pull up your property value, too.
The bottom line is to measure the cost of any improvements you want to make against the overall values in your neighborhood. If you over-improve for the neighborhood, you may not necessarily recover your costs or boost your property value significantly.
Do you have more questions about Property Value? Ask one of our agents.
