Salt Lake Comparative Market Analysis
How is the value of a home determined? This is great question that has more than one answer.
Home Values from a Buyer's Point of View
From the buyer's perspective it is supply and demand. They comparison shop, they will look at all the homes in their area and price.
They will compare the price along with the features and benefits that are associated with the property. Things like area, square footage, number of bathrooms, garage, condition...
As you can see the example in the table below, it is that simple. The property that offers the most features and benefits for the best price is the one that has the most value to a buyer.
Table 1.1
|
Item
|
Prop # 1
|
Prop # 2
|
Prop # 3
|
| List Price |
$200,000 |
$200,000 |
$190,000 |
| Area |
Similar |
Similar |
Similar |
| Sq Ft |
2,350 |
2,300 |
2,450 |
| Bedrooms |
3 |
3 |
4 |
| Baths |
2 |
2 |
2.5 |
| Gar |
2 |
2 |
2 |
| Condition |
Fair |
Fair |
Remodeled Kitchen |
Things Don't Have an Affect on Value
What you paid
What you owe
What you want
What you need
Home Values from the Bank's Point of View
Banks use appraisers to determine value. Appraisers use a comparative method, but they go by past history instead of the active listings.
Continued
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