What
is the difference between market value and
appraised value?
A:
Appraised
value of a house is a certified appraiser's
opinion of the worth of a home at a given
point in time. Lenders require appraisals
as part of the loan application process;
fees range from $200 to $300.
Market
value is what price the house will bring
at a given point in time. A comparative
market analysis is an informal estimate
of market value, based on sales of comparable
properties, performed by a real estate
agent or broker. Either an appraisal or
a comparative market analysis is the most
accurate way to determine what your home
is worth.
Q:
How
do you increase the value of your property?
A:
The
biggest factor that can affect property
value -- market conditions -- are outside
of your control. But other factors -- including
the condition of the property, certain home
improvements and neighborhood stability
and safety -- are not.
For example, specific home improvements
can increase your property value above
the cost of the improvements themselves,
such as remodeling a kitchen, adding a
bathroom, finishing a basement or upgrading
landscaping. Just be sure that quality
pays with remodeling. A bad remodeling
job will do little to boost your property
value.
If you live in a high-crime area, an
organized community watch program not
only will lower the crime rate but can
enhance property values, too. It also
helps to live in an area where other homeowners
are upgrading their homes, which can help
pull up your property value, too.
The bottom line is to measure the cost
of any improvements you want to make against
the overall values in your neighborhood.
If you overimprove for the neighborhood,
you may not necessarily recover your costs
or boost your property value significantly.
Q:
What
are the standard ways of finding out how
much a home is worth?
A:
A
comparative market analysis and an appraisal
are the standard methods for determining
a home's value.
Your real estate agent will be happy to
provide a comparative market analysis,
an informal estimate of value based on
comparable sales in the neighborhood.
Be sure you get listing prices of current
homes on the market as well as those that
have sold. You also can research this
yourself by checking on recent sales in
public records. Be sure that you are researching
properties that are similar in size, construction
and location. This information is not
only available at your local recorder's
or assessor's office but also through
private companies and on the Internet.
An appraisal, which generally costs $200
to $300 to perform, is a certified appraiser's
opinion of the value of a home at any
given time. Appraisers review numerous
factors including recent comparable sales,
location, square footage and construction
quality.
Q:
How
can I improve the value of my property?
A:
The
biggest factor outside of a homeowner's
control is market conditions. But other
issues -- including the condition of the
property, specific home improvements and
neighborhood stability and safety -- can
influence property values.
The greatest rise in home
prices occurs when the economy is strong
and the number of home sales is increasing.
Though markets vary, that has occurred
twice in recent history -- in the early
1970s, the late 1980s and late 1990s.
Specific home improvements
can increase the value above the cost
of the improvements. According to Remodeling
Magazine, which publishes an annual
"Cost vs. Value" remodeling
report, a remodeled bathroom returns 81
percent to the owner; a bathroom addition,
89 percent; and a master bedroom suite,
82 percent. Remember, quality pays. Well-planned
and well-executed remodeling jobs are
a good investment while bad work seldom
enhances value or livability.
The safety and security
of a neighborhood can affect property
values, too. If you live in a high-crime
area, an organized community watch program
not only will lower the crime rate but
give home values a boost, too.
Q:
Should
I add on or buy a bigger home?
A:
Consider
these questions before making a choice between
adding on to an existing home or moving
up in the market to a bigger house:
* How much money is available, either from
cash reserves or through a home improvement
loan, to remodel the current house?
* How much additional space is required?
Would the foundation support a second floor
or does the lot have room to expand on the
ground level?
* What do local zoning and building ordinances
permit?
* How much equity already exists in the
property?
* Are there affordable properties for sale
that would satisfy housing needs?
Ultimately,
the decision should be based on individual
needs, the extent of work involved and
what will add the most value.
Q:
What
kind of return is there on remodeling jobs?
A:
Remodeling
Magazine
produces an annual "Cost vs. Value
Report'' that answers just that question.
The most important point to remember is
that remodeling a home not only improves
its livability for you but its curb appeal
with a potential buyer down the road.
Most recently,
the highest remodeling paybacks have come
from updating kitchens and baths, home-office
additions and extra amenities in older
homes. While home offices are a relatively
new remodeling trend, for example, you
could expect to recoup 58 percent of the
cost of adding a home office, according
to the survey.
Q:
Where
do I get information on housing market stats?
A:
Your
HomeJoy Real Estate agent is a good source
for finding out the status of the local
housing market. So is your statewide association
of Realtors, most of which are continuously
compiling such statistics from local real
estate boards.
For overall housing statistics,
U.S. Housing Markets, www.MeyersGroup.com,
regularly publishes quarterly reports
on home building and home buying. Your
local builders association probably gets
this report. Finally, check with the U.S.
Bureau of the Census in Washington, D.C.;
(301) 763-3199; census.gov. The Chicago
Title Company also has published a pamphlet,
"Who's Buying Homes in America."
Write Chicago Title, 601 Riverside Ave.,
Jacksonville, FL 32204; (888) 934-3354;
ctic.com.
Copyright
2006 Inman News Features
FREE
HOME SEARCH SERVICE
Use
this form to order a list of homes that meet your criteria.
Please give as much detail as possible.
