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What is Your Home Worth?
Comparative Market Analysis:A comparative market analysis should be provided by your Realtor© as a way to help you determine where you want to list your home for sale. Keep in mind, it has nothing to do with how much you have improved the house or how much you owe on a mortgage. It is an estimate of value based on similar homes that have sold recently in your market area. It should also be a reflection of what similar homes for sale are priced at in your market area.
A good Realtor will be familiar with your market area and not just use homes that have sold within your city or within a certain distance from your home. We then make adjustments for differences between your home and those that have sold. These differences can include square footage, number of bathrooms and bedrooms, the existence of a swimming pool and the condition of your home. However, it is still just an estimate. Our objective is to help you determine a price for your home where it will sell in as short a time as possible without undervaluing it. Often when you choose to a price above the recommended value your home may not receive the attention you hope for because savvy buyers are doing their own market analysis. They know when a home is over priced. Your home may stay on the market for a longer period of time and buyers may wonder why. This too can lead to further erosion in perceived value, which will only hurt your ability to sell your home.
Fair Market Value: A home is ultimately worth what a buyer is willing to pay for it. Everything else is really an estimate of value.
Take, for example, a hot seller’s market when demand for housing is high but the inventory of available homes for sale is low. During this time, homes can sell above and beyond the asking price as buyers bid up the price. The fair market value, or worth, is established when “a meeting of the minds” between the buyer and the seller takes place.
Appraised Value: In Florida each county has an appraiser that determines the value of a home for tax purposes. This is also not a measurement of market value.
Appraised Market Value: More than likely if you are purchasing a home and intend to finance the lender will hire a certified appraiser to determine the appraised market value. If the value meets or exceeds the contract price then the transaction can proceed. If it does not the lender will most likely only lend you the percentage of the appraised value that you applied for in your mortgage application. That gives you two options: you may choose to cancel or renegotiate the contract prices, or you may choose to bring more cash to closing than you originally intended. |
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