Comparing the Worth of Your Home to the Market
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. To help prevent you from overpaying, review comparable homes that have sold within the past year along with the listing, or asking, price on current homes for sale.
An appraisal of a home can be provided by a certified appraiser. 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.
The Difference between List Price and Sale Price
The list price is a seller’s advertised price, or asking price, for a home. This price is a rough estimate of what the seller wants to complete a home sale and can be priced high, low (which does not happen often), or very close to what they hope to receive. One effective method to determine if the list price is a fair one is to look at the sales prices of similar homes that have recently sold in the area.
The sales price is the actual amount a home sells for.
Lenders typically require an appraisal, which run between $200 and $300, before they will approve a mortgage loan. In doing so, the lender is protected by ensuring the home is worth the money you want to borrow.
You also can check recent home sales in public records, through private firms, and on the Internet to help you determine a home’s potential worth.