What’s It Worth Officially?

By
Real Estate Agent with Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales 3090099

There’s a lot of news about home values and current appraisal values as well as the appraisal process.  With markets changing so rapidly it can be a difficult process.  The appraisers do not sit in a dark room and use a crystal ball to produce an all powerful document of a home’s value.  There’s no magic involved.  Here’s how it’s done.

An appraiser needs to compare similar recently sold properties. And it’s not just the final price that counts.  They also factor in any "incentives" offered, such as sellers who pay closing costs or remodeling allowances.  If similar properties have differences in lot value, condition, improvements adjustments are made.

Perhaps the most important factor that lenders review in an appraisal is the closing dates of the "comparables" (other homes by which yours is measured).  Unfortunately, with today’s stricter lending requirements, most "comps" must have sold within the last 60 or even 45 days to carry weight.  Markets change so quickly that any sale price over two months old may be completely irrelevant.  In this market, in some slower selling areas, an appraiser needs to go further away to find recent sales, which occasionally makes the value suspect to some.

Now a few words about how foreclosures in a neighborhood affect determination of value.  Technically, appraisers shouldn't consider them, because they don't fit the Appraisal Institute's definition of "a property reasonably exposed in a competitive market."  However, if several area homes have been abandoned, the market in such areas is in fact being driven by distressed sales and the appraised value will reflect this fact.

If you're planning to sell, an experienced Realtor can make you a Comparative Market Analyses which can give you a good approximation of appraised value.  If you have concerns about the accuracy of this value, you can order your own appraisal and have this ready to support the value of your home.  Unfortunately, an appraisal will be considered out of date within a month or two after the date of completion will no longer have any authority.

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gabrielle Kamahele Rhind 11/27/2009 10:00 PM
Topic:
Home Selling
Location:
Florida Martin County
Groups:
Advice for Sellers
Tags:
market
appraisal
value

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Rainmaker
1,402,703
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

I just spoke to a listing agent of a short sale who said the bank said BPO's were higher than asking price. He and I both were just shaking our heads!

Nov 27, 2009 10:07 AM #1
Rainmaker
534,794
Liz Moras Migic
Chilliwack, BC
Chilliwack, British Columbia - Realtor

Good information Gabe well written - and hopefully will help the public understand the process!

Nov 27, 2009 10:07 AM #2
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks Liz.

Well Vickie, I've dealt with a short sale negotiator that uses Zillow for his estimates of value.  Go figure.

Nov 27, 2009 10:09 AM #3
Rainmaker
383,626
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Gabe: very good information - the best way to know what it is worth is to ask a competent Realtor - like you!

:)

Nov 27, 2009 10:49 AM #4
Rainer
41,407
Suzy Morris
The Morris Team - Carlsbad, CA

Great information Gabe.  I know many homeowners are confused by the different numbers they get from an appraiser/CMA and even Zillow. 

Nov 27, 2009 11:06 AM #5
Ambassador
1,443,426
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Gabe,

Values are changing pretty quickly. You're right, the most recent comparable data carries the most weight in an appraisal.

Rich

Nov 27, 2009 12:08 PM #6
Ambassador
2,758,931
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

I am not involved on that end of the transaction, but I did find your article very informative...

Helping you live your American dream...

Nov 27, 2009 08:39 PM #7
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks Matt, Suzy, Rich and Michael.

Nov 27, 2009 09:39 PM #8
Rainmaker
861,325
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ
Broker/Owner

GOOD MORNING GABE!  I'd like to re-blog this one - many people ask me "how do appraisers figure out value" - especially with the number of foreclosures!  This is a nice, concise way to explain it! -- Gabrielle

Nov 27, 2009 09:59 PM #9
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks Gabrielle.

Nov 27, 2009 10:25 PM #10
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for your comments, always appreciated.

May 29, 2015 06:47 AM #11
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Vickie, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:49 AM #12
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Liz, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:49 AM #13
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Matt, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:49 AM #14
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Suzy, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:49 AM #15
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Richard, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:49 AM #16
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Michael, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:50 AM #17
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Gabrielle, thanks for taking the time to comment it is always appreciated.

Dec 22, 2017 07:50 AM #18
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Gabe Sanders

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