At first glance, determining your home’s value may seem simple enough. But when it comes to appraising the actual value, the process is quite different from other types of assessments. Certain factors associated with the review are required and exclusive to real estate.
If you plan to rent or sell your home in the future, it is crucial to have its value estimated by a professional home appraiser, in order to determine how profitable an investment in a new home will be when weighed against the merits of your current property.
Familiarizing yourself with how the process works can help put you on the road to realty success.
How Are Home Values Appraised?
Appraisals are typically performed to determine a house’s appreciation over time and its potential for rental income. These reviews focus on a property’s attributes, improvements, and drawbacks in comparison to similar houses in the area.
After evaluating these factors, home appraisers can provide you with an estimate of the property’s value and its ability to generate income in the current market, in turn giving you a firm grasp on the profitability of your existing home or a potential property.
Assessed Value vs. Market Value: What’s the Difference?
It’s important to understand that even though the terms “assessment” and “appraisal” are often used interchangeably, they are not the same. An assessment is a yearly estimation of home value, used for tax purposes, while an appraisal outlines how much a home is worth in terms of selling or renting in a given market.
Assessing home values is a process executed by local government workers, while appraisals are performed by third-party companies. The assessed value of a home is also tied to its market value, which makes an appraisal all the more important.
Major Factors Impacting Home Value
Various features of the home and marketplace are used to establish its value, including the following:
- Market trends
- Comparable property value
Simple Ways to Evaluate Your Home
There are several steps you can take when initially estimating the value of your home.
- Learn about the price of similar properties in your area. You can research these figures via online real-estate sites.
- Factor in the costs of any improvements that you have made. Review the renovations and upgrades in which you’ve invested, including appliances.
- Use online comparison tools. These solutions can offer you a rough estimate of your home’s value based on typical factors such as square footage, architectural style, building materials, and other components.
However, you need to keep in mind that this approach will offer you only a rough idea of your home’s value. Since calculating these metrics is a complex process, you cannot get an accurate estimate of your home’s overall value with general figures.
As a result, it is vital to reach out to a real estate agent or a home appraiser to receive a precise appraisal for your home, utilizing all associated factors.
Ask the Professionals
If you would like to begin the process of buying a new home, our team is here to guide you. Contact us today at First Centennial Mortgage to learn how our team can help.