Demand
– Demand is in the eye of the beholder.It varies from person to person.The demand for a particular piece of real estate changes
as the wants of each individual changes.
Utility
– In order for real estate to have value it must have usefulness
or utility.Usefulness
creates a desire for possession and has the power to give satisfaction.Will the typical buyer in the marketplace have their needs
met by purchasing your home?
Scarcity
– In order for real estate to be of value it must be relatively
scarce.If too many
houses like yours are for sale, it will negatively impact the value
of your home.
Purchasing
Power – Purchasing power is created by desire.Can the buyer who desires the property afford the property?The more people that can afford the property, the better.
What You Need to Know About a Real Estate Appraisal:
It’s
an objective opinion of value.If three appraisers appraised the same property, they might
assign three different estimates of value.
Most
sellers, buyers and lenders want an appraisal that reflects the
market value rather than the insured value, assessed value, sentimental
value or other types of value.
An
appraiser’s estimate of value typically reflects the current market
conditions in the subject property’s marketplace.This can change dramatically if market conditions shift.
The
appraiser’s estimate of value reflects the most probable price the
property will sell for without special considerations or circumstances.
The
best indicator of market value for residential property is found
by applying the sales comparison approach.
Most
lenders base a buyer’s loan amount on either the sales price or
the appraised value of the property; whichever is less.
Many
homebuyers today are writing their offers to purchase subject to
the property appraising at or above the sales contract price.
What Every Appraiser Considers When Comparing Your Properties to Others:
Market
conditions on the date of sale
Location
The
site/view both looking at the property and looking from the property
out
The
design and appeal of the dwelling
The
quality of construction
The
age of the property
The
condition of the property
Total
number of rooms
Number
and type of rooms (bedrooms, bathrooms, etc.)
Square
footage (gross livable area)
Is
there a basement?Is
it finished?If so,
number and types of rooms.
How
functional is the property?
Is
there central air conditioning?
What
type of car storage is available?
Are
there any special features that your property offers? (porches,
patios, pool, fireplace, etc.)
Were
there any special financing or special sales considerations that
might have impacted value for the comparable properties?
