What
is the difference between market value
and appraised value?
A:
The
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
HomeJoy 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:
Can
you buy homes below market?
A:
While a typical buyer may look at
five to 10 homes before making an
offer, an investor who make bargain
buys usually go through many more.
Most experts agree it takes a lot
of determination to find a real "bargain."
There are a number of ways to buy
a bargain property:
* Buy a fixer-upper in a transitional
neighborhood, improve it and keep
it or resell at a higher price.
* Buy a foreclosure property (after
doing your research carefully).
* Buy a house due to be torn down
and move it to a new lot.
* Buy a partial interest in a piece
of real estate, such as part of a
tenants-in-common partnership.
* Buy a leftover house in a new-home
development.
Q:
How
do you determine the value of a troubled
property?
A:
Buyers considering a foreclosure property
should obtain as much information
as possible from the lender about
the range of bids expected.
It
also is important to examine the
property. If you are unable to get
into a foreclosure property, check
with surrounding neighbors about
the property's condition.
It
also is possible to do your own
cost comparison through researching
comparable properties recorded at
local county recorder's and assessor's
offices, or through Internet sites
specializing in property records.
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 several times
in recent history -- including the
early 1970s, 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:
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.
Copyright
2006 Inman News Features
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