APPRASIALS & MARKET VALUE
Yes. A comparative market analysis and an appraisal are the two most common and reliable ways to determine a home’s value.
Your real estate agent can provide a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties. Reviewing comparable homes that have sold within the past year along with the listing, or asking, price on current homes for sale should prevent you from overpricing your home or underestimating its value.
A certified appraiser can provide an appraisal of a home. After visiting the home to check such things as the number of rooms, improvements, size and square footage, construction quality, and the condition of the neighborhood, the appraiser then reviews recent comparable sales to determine the estimated value of the home.
You also can check recent sales in public records, through private firms, and on the Internet to help you determine a home’s potential worth.
The list price is your advertised price, or asking price, for a home. It is a rough estimate of what you want to complete a home sale. A good way to determine if the list price is a fair one is to look at the sale prices of similar homes that have recently sold in the area.
The sale price is the actual amount the home sells for.
A certified appraiser who is trained to provide the estimated value of a home determines its appraised value. The appraised value is based on comparable sales, the condition of the property, and several other factors.
Market value is the price the house will bring at a given point in time, once you and the buyer establish a “meeting of the minds” on price.
The short answer: a home is ultimately worth what is paid for it. Everything else is really an estimate of value. Take, for example, a hot seller’s market when demand for housing is high but the inventory of available homes for sale is low. During this time, homes can sell above and beyond the asking price as buyers bid up the price. The fair market value, or worth, is established when “a meeting of the minds” between you and the buyer takes place.
They can certainly be held accountable, particularly if they had prior knowledge of a material fact or should have known about it.
For example, if the seller has to use pans to collect water after a heavy rain, it is the agent’s responsibility to question the seller about the integrity of the roof, and then relay this information to potential buyers. However, if the seller deliberately hides a defect from the agent for which the agent had no prior knowledge, then the agent is not accountable.
Agents are not home inspectors, but they are expected to use their best judgment when something appears suspicious.
Disclosure could protect you from a lawsuit. Today, home sellers in most states must now fill out a form disclosing material facts about their homes. Material facts are details about the home’s condition or legal status, as well as the age of various components.
If your state does not require a written disclosure, the real estate laws probably require sellers to disclose any known problems with the home they are selling.
The following examples include details that would qualify as material facts that must be revealed by sellers about their homes:
- Damage from wood boring insects
- Mold or mildew in the home
- Leaks in the roof or foundation walls
- Amount of property taxes paid annually
- Problems with sewer or septic systems
- Age of shingles and other roof components
- A buried oil tank
- Details about any individual who claims to have an interest in the property
- Information about a structure on the property that overlaps an adjacent property
Some things are not material facts and do not have to be disclosed. They include personal information about the seller and the seller’s reason for moving.
Among those things that may or may not be material facts: whether a death took place in the home or whether a home is considered haunted.