Your Home's Value

With all of the advertising you see today that promises to tell you the value of your home, you may find it interesting to know that the value of your home that is given to you by these companies is of absolutely no value to anyone who has any say in whether or not a buyer can obtain a loan to purchase your home. That's right - these values are 100% worthless. For you, as a seller or someone who is looking to refinance your home, the only assessment of value that carries any weight whatsoever is that of the appraiser who is hired on behalf of a lender to determine fair market value of your home. Furthermore, the only person who can influence the valuation of an appraiser is a licensed real estate agent or broker, armed with facts and information that is sometimes not readily available to the appraiser. The premise behind determining a homes fair market value is rather lengthy and varies slightly from area to area. I have condensed the process down into easily digestible pieces so that you will be armed with enough information to determine if your real estate agent has given you a proper assessment of your homes value. To determine the value of your home you will need to start with three homes that are similar in size, number of bedrooms and baths, garage spaces, basements, etc. to your home. These three homes, called comparables, need to have sold within one year at most of when your home will sell. Each of these homes should be in the same subdivision as your home or within one mile if possible. Each of these homes will have the value adjusted up or down based on differences from your home, the subject property. For example, the home down the street in the same subdivision is exactly like yours except it has a two-car garage and your home a one car garage. Your neighbors' home sold for $300,000 three months ago. If one garage space is worth $5,000, then your home is worth the same amount as your neighbors home minus the difference to account for the smaller garage or $295,000. Adjustments in value of more than 15% will be looked at with suspicion during the underwriting process and should be avoided at all cost. Subjective terms such as nice and pretty to not correlate to the value of your home. While this is only a primer on your homes value, it is a good place to start. A lender will only lend money on what is determined to be the fair market value, which is defined as what a willing buyer will pay a willing seller after a property has been for sale for a reasonable time without extraneous pressures on either party. With this information in hand, you will be equipped to hire a professional real estate agent who has access to sold properties in your area to determine the correct value of your home. If you live in Alpharetta, please call Ryan Ward, Classic Atlanta Properties. Visit my Alpharetta Real Estate website for more information about Alpharetta.