The market value of home is the price at which property will sell in a competitive market, in its current condition, within 30 to 90 days. It’s considered an educated guess or opinion. It can be precise provided all significant details are taken into account and the correct method is applied. Here’s what you need to know about market value.
Factors Affecting Market Value
The market value of home can be impacted by several factors. The home’s location and its proximity to public transportation, good schools, highways, shopping centers and parks can increase it. Small upgrades in your kitchen, bathroom, decks and patios plus enhancing your home’s overall curb appeal can increase its market value. Check some more factors.
Eco upgrades such as installing solar panels, energy efficient windows, energy star appliances, or more efficient plumbing can add value to your home. You may also qualify for tax credits with these upgrades.
The current demand and supply, your home’s condition and how well the home is advertised can also increase your property’s value. Factors such as your home’s original cost, major upgrades and rebuilding costs do not impact on market value. Damage through mould, fire or natural disasters can also decrease property value.
How to Determine the Market Value of Home
Part of the work of a professional realtor is to appraise properties by taking into account all the necessary factors.For sellers, an appraisal is necessary to make a home listing. For buyers, an appraisal is required by lenders to ascertain the amount requested is equal to the property amount.
There are three possible approaches your real estate agent can use for an appraisal.
- The income approach assesses a property’s income potential and is normally used for investment or commercial properties.
- The sales comparison approach compares similar properties within the neighbourhood using price per unit.
- The cost approach appraises your land value in addition to the cost involved in replacing a structure built on it. The method can also be used to determine rebuilding costs following a disaster.
The most commonly used approach is the sales comparison approach in which appraisers perform a comparative market analysis of your property with others. Where necessary, the other appraisal methods may be used.
Does Market Value Affect Property Taxes?
The estimated market value of home is what property taxes are typically based on. Read more. Your local real estate agent is responsible for determining estimated market values of properties within your community. This can be found on your assessment roll and property tax bill.
Assessors can only re-estimate property market value if there has been any physical change on it. If your community hasn’t gone through a reassessment recently, your home’s current market value and subsequent property tax bill may not be a true reflection.
If buyers disagree with appraisals, they can contact lenders about getting another appraisal. Sellers can dispute the value by offering their own comparative analysis. A formal judicial and administrative review of the appraisal can be performed by state agencies that oversee appraisers within your area.
Many sellers will conduct an online property valuation to get a rough idea of what price they could achieve for their property, but this will not be anywhere near as accurate as a professional valuation conducted by a local estate agent with expert knowledge of the area and housing market.
Experienced realtors know how to appraise the market value of home while sustaining ethical and professional standards. To eliminate guesswork learn more here.