It is important that you have a good idea as to the worth of your property. A buyer and seller may agree to any purchase price. If it is going to be a cash deal and the buyer and seller are not related, the transaction can close. In the majority of home purchases, the buyer will be obtaining a mortgage. Before the transaction can close, the underwriter of the mortgage will request an opinion of value from a licensed appraiser. It is the appraisers duty to justify the sales price to the lender. If the appraiser reports that the sales price was too high, even when the buyer and seller agreed to that price, then one of the following options will happen: 1) The buyer can back out of the deal with no penalties. 2) The buyer can pay the difference between the sales price and the appraised value in cash. 3) The seller will reduce the price of the property by the difference of sales price and appraised value. There is a possibility of appealing the appraised value. The ideal situation is to obtain the information that the appraiser will use to determine value and to use this information and calculate an approximate price range before you price your home. The information is available through the Multiple Listing Service for homes sold by Realtors and through the County Assessors Office for non Realtor sales. The information is compiled into a report called a Comparative Market Analysis or CMA. The CMA uses primarily information about properties similar to yours, in the same subdivision, that have sold in the last 6 months. Three good comparables are needed. Obviously, in smaller or newer subdivisions, these criteria cannot be adhered to. Adjustments to proximity or timeliness of sales can be made. The comparable properties are identified. Differences between your property and the comparable properties are noted and a dollar value is assigned to them. Common differences that reflect price are square footage of living space, number of garages, type of roof, size of lot, seller contributions to buyer incentives, type of fencing and landscaping, pool or spa, condition of property, and location. The information is tabulated into a computer program and is presented with a 3-5% price range. If you are pricing your home below this range, you might be costing yourself some well earned money. If you are pricing your home above this range, be prepared to justify the difference. To request a free Comparable Market Analysis, e-mail us with your address and we will get it to you within 48 hours. If you have a unique property, either a custom home or a tract home that has uncommon upgrades that you feel could not be properly reflected by a CMA, then you should avail yourself of the services of a licensed appraiser. |
Jeannine Cutter (702) 283-8882 David Berg (702) 281-5827 |
What is My Home Worth? |
