FAQ: What is the difference between Market Value and Appraised Value?
Posted by: raindrop 6 years, 6 months ago
The Market Value is the value at any given point in time, established most commonly by a Comparative Market Analysis (CMA). A CMA looks at recent sales in your home, or prospective home's, market.
After identifying up to 5 recent sales (aka comps) in the home's market, adjustments are made for differences in the homes, such as bedrooms, bathrooms, location, etc. These adjustment values, or dollar amounts, can seem arbitrary, but as an educated and experienced Realtor, I use my extensive knowledge on the different values to most accurately reflect the value difference between two homes. Once I have made the adjustments on the individual recent sales, I generate the value by looking at the overall picture of the comps.
When I am performing a CMA, it is important that I have extensive knowledge on the different homes that I am comparing. For example, when I sold 1021 Pine Street, numerous Buyer's Agents were insisting that some homes were comps. However, since I had extensive knowledge on the referenced homes, I was able to obtain the maximum value for my clients.
The Appraised Value of a home is the value established by a certified appraiser. Real Estate Appraisers use 3 different approaches to establishing the appraised value, including: cost, sales comparison, and income capitalization. Lenders require an appraisal on the home that a Buyer is hoping to obtain a loan. Appraisals cost between $250-$600 depending on the area.
For more information on CMA's, Appraisals, or Market Value, Contact Kate!Share on Twitter Share on Facebook
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