What is Market Value?
For buying and selling purposes, in Nashville and Middle Tennessee, appraisals are usually based on market value - what the property could be sold for. Other types of value include insurance value, replacement value, assessed value for property taxes and refinancing value.
Your REALTOR® or appraiser can assist you in determining what the buyer would be most willing to pay. Changes in market conditions can dramatically alter appraised value
Appraisal vs. Market Value -Frequently Asked Questions
Q: How is a home's value determined?
A: You have several ways to determine 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. On average, an appraisal costs about $450 for a $350,000 house. Typically, the buyer's lender will order the appraisal on behalf of the buyer. The seller is not required to have an appraisal done to sell their home. Your REALTOR® can help with a home value analysis and help you determine what price would get your home sold.
A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and 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. You also can find comparable sales information available on various real estate Internet sites.
Q: What is the difference between market value and appraised value?
A: Appraised value 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 $350 to $450.
Market value is what price the house will bring at a given point in time.
Q: What's my house worth?
A: A home 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. Your home is not necessarily worth what you have invested in it. Insisting that you must have $XX will not get your house sold. You must be willing to be flexible.
An appraisal is a certified appraiser's estimate that determines the value of a home at a given point in time. To make their determination, appraisers consider above grade 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. Just FYI, basements, even those finished out by the builder do not have the same value as above grade square footage.
Q: What standards do appraisers use to estimate value?
A: Appraisers use several factors when estimating value including historical records, property performance, condition of the home and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611 (312) 335-4458.