Seller Resources - Articles

Selling Your Home - Appraisals & Market Value

What is the difference between market value and appraised value?
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 $300 to $800. 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 and comparison to competing listings, 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.  Appraisers work with historical data using recent sales.  Real estate brokers use both historical data and current listing information.

What's a house worth?
A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property's value, most people turn to either an appraisal or a comparative market analysis. An appraisal is a certified appraiser's estimate of the value of a home at a given point in time. Appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account. Appraisers generally charge from $300 to $800 for residential appraisals. A comparative market analysis is a real estate broker's or agent's informal estimate of a home's market value, based on sales of comparable homes in a neighborhood and a comparison of currently active listings, using criteria similar to that the appraiser uses. Most agents will provide you a comparative market analysis for free.  If you live in a public disclosure state, you can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder or assessor offices, through private real estate information companies or on the Internet.  Idaho does not require disclosure and therefore sales price information may not be available through county records.

How is a home's value determined?
You have several ways to estimate the value of a home. An appraisal is a professional estimate of a property's market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home and availability of comparable sales and requirements of the type of appraisal. A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and listings with similar property attributes. Most agents offer free analyses in the hopes of winning your business. You also can get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.  Some online sites do an estimate based on general market information without visually inspecting the property and are generally not particularly accurate.

What standards do appraisers use to estimate value?
Appraisers use several factors when estimating a home's value, including the home's size and square footage, the condition of the home and neighborhood, comparable local sales, any pertinent historical information, sales performance and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 200 W. Madison, Suite 1500, Chicago, IL 60606, 7 a.m. - 5 p.m. CT; 888-7JOINAI (756-4624).

Kathy Parsells
Kathy Parsells
325 W. Main Street Lewiston ID 83501