How much is it worth? We tend to see our homes as a nest egg. After all, it is an asset.
Our home’s value fluctuates depending on the economy as well as various other factors. Real estate valuation measures what a home is really worth.
If your curious as to what factors into your home’s worth or what the process is like don’t worry. We’re about to go over the home appraisal process.
Formal Valuation v. Market Appraisal
A professional valuer is the only one that can give a formal valuation. Real estate valuation methods come in three sub-categories: Kerbside, desktop, and full valuation.
A Kerbside or drive-by-valuation is as the name implies a valuation based on your home’s outward appearance. A desktop valuation is an appraisal based on what information is available online. Both are less expensive alternatives to a full residential real estate valuation, but without the benefits of having your home’s inside value-added.
Full valuations are typically required by lenders to help them how much they will be willing to lend. Potential home buyers or sellers will benefit from a full appraisal to properly gauge what their home is really worth.
A market appraisal is conducted by a real estate agent. It can help you estimate the value of your home based on other home sales in your area. You may find this helpful if you are not seeking a loan or just want a ball-park guess at what you could be sitting on.
Real Estate Valuation Process
Appraisals are requested mostly by lenders. If they are going to be loaning large sums of money they want to make sure you have enough collateral to support the loan. That is also why a lender must hire an appraiser with no vested interest in the property. Appraisal fees are usually covered by the potential borrower.
An appraiser with no direct interest in the property must be found. Similar to a market appraisal, a real estate valuation will also have some influence from sales home sales similar to yours.
A complete inspection will include the interior and exterior of the home, including repairs your home may need. The number of rooms, square footage, and location of your home will also be factors. The report will be a summary of the appraiser’s findings and include public land records, sketches, pictures, a street map, and an explanation as to how the appraiser got the number he did.
Reap What You Sow
If you are wondering if the sale of your home will help you reach your retirement goals, find out. Having a realistic perspective can save you time, stress, and help you plan accordingly.
Real estate valuations are also used on rental properties. Charging the market rate for rent never hurts. We invest time and money in the present with the hope of reaping bountiful rewards in the future.
Undervaluing your property will cost you, so don’t take the risk. Find out how much your home is worth.
Interested in learning more about the housing market? Contact us for more about your real estate needs.