How Much is a Property Worth?
There are three main ways to find out how much a property is worth--through a comparative market analysis (CMA), through a professional appraisal, and from the Zillow website.
CMA
A CMA is used by the broker or the salesperson to help a seller determine the listing price for their property, or a buyer to help formulate the price of an offer. The amount (typically a price range rather than a specific number) is determined by comparing the prices of recently sold (within the last 6 months) and currently for-sale properties that are similar in location, style, and amenities to the seller’s property. Information for a CMA is typically compiled from the MLS (Multiple Listing Service) database which contains extensive information on property that has been bought, sold and that is currently on the market.
Appraisal
An appraisal is an opinion of value; a detailed estimate of a property’s value conducted by a professional appraiser. A mortgage lender will typically hire an appraiser after a Purchase and Sale (P&S) agreement is signed to determine if the accepted offer price and loan amount are in alignment with current market conditions. The appraiser visits a property and compares it to other similar homes using square footage, finishes, age, condition, location, and MLS data. If an appraisal comes in lower than the accepted offer, the lender will not make the loan, forcing the buyer and seller to renegotiate the deal.
Zillow
Zillow is a popular website which provides property-value estimates called Zestimates. Valuations are computed using a proprietary formula calculated from public and user-submitted data. However, beware--Zestimates are not always accurate, and should be used in conjunction with a CMA to determine the most accurate price range of a property.
Contact RLA Real Estate to find out what a property is worth.
CMA
A CMA is used by the broker or the salesperson to help a seller determine the listing price for their property, or a buyer to help formulate the price of an offer. The amount (typically a price range rather than a specific number) is determined by comparing the prices of recently sold (within the last 6 months) and currently for-sale properties that are similar in location, style, and amenities to the seller’s property. Information for a CMA is typically compiled from the MLS (Multiple Listing Service) database which contains extensive information on property that has been bought, sold and that is currently on the market.
Appraisal
An appraisal is an opinion of value; a detailed estimate of a property’s value conducted by a professional appraiser. A mortgage lender will typically hire an appraiser after a Purchase and Sale (P&S) agreement is signed to determine if the accepted offer price and loan amount are in alignment with current market conditions. The appraiser visits a property and compares it to other similar homes using square footage, finishes, age, condition, location, and MLS data. If an appraisal comes in lower than the accepted offer, the lender will not make the loan, forcing the buyer and seller to renegotiate the deal.
Zillow
Zillow is a popular website which provides property-value estimates called Zestimates. Valuations are computed using a proprietary formula calculated from public and user-submitted data. However, beware--Zestimates are not always accurate, and should be used in conjunction with a CMA to determine the most accurate price range of a property.
Contact RLA Real Estate to find out what a property is worth.