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Real Estate Value - Q & A
| 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 $200 to $300.
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, performed by a real
estate agent or broker.
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| Q: |
How do you
find out the value of a troubled property? |
| A: |
Buyers
considering a foreclosure property should obtain as much information as
possible from the lender about the range of bids being sought.
It also is important to examine the property. If you are unable to
get into a foreclosure property, check with surrounding neighbors about
the property's condition.
It also is possible to do your own cost comparison through
researching comparable properties recorded at local county recorder's
and assessor's offices, or through Internet sites specializing in
property records.
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| Q: |
How do you
increase the value of your property? |
| A: |
The
biggest factor outside of a homeowner?s control is market conditions.
But other issues -- including the condition of the property, specific
home improvements and neighborhood stability and safety -- can influence
property values.
The greatest rise in home prices occurs when the economy is strong
and the number of home sales is increasing.
Though markets vary, that has occurred twice in recent history -- in
the early 1970s and the late 1980s. However, single-family homes
appreciated much more than condominiums. While overall market conditions
are out of the homeowner's control, other factors are not.
For example, specific home improvements can increase the value above
the cost of the improvements. According to Remodeling magazine, which
publishes an annual "Cost vs. Value" remodeling report, a
remodeled bathroom returns 81percent to the owner, a bathroom addition,
89 percent and a master bedroom suite, 82 percent.
Remember, quality pays. Well-planned and well-executed remodeling
jobs are a good investment while bad work seldom enhances value or
livability.
If you live in a high-crime area, an organized community watch
program not only will lower the crime rate but also have been known to
enhance property values.
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| Q: |
What are the
standard ways of finding out what a house is valued at? |
| A: |
A
comparative market analysis and an appraisal are the standard ways
consumers, lenders and realty agents deterimined what a home is worth.
Your real estate agent will be happy to provide a comparative market
analysis, an informal estimate of value based on comparable sales in the
neighborhood. You also can research "the comps" yourself by
checking on recent sales in public records. Be sure that you are
researching properties that are similar in size, construction and
location.
This information is not only available at your local recorder's or
assessor's office but also through private companies and on the
Internet.
An appraisal, which generally cost $200 to $300 to perform, is a
certified appraiser's opinion of the value of a home at any given time.
Appraisers review numerous factors including recent comparable sales,
location, square footage and construction quality.
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| Q: |
Can you buy
homes below market? |
| A: |
While
a typical buyer may look at five to 10 homes before making an offer, an
investor who make bargain buys usually go through many more. Most
experts agree it takes a lot of determination to find a real
"bargain." There are a number of ways to buy a bargain
property:
*Buy a fixer-upper in a transitional neighborhood, improve it and keep
it or resell at a higher price.
* Buy a foreclosure property (after doing your research carefully).
* Buy a house due to be torn down and move it to a new lot.
* Buy a partial interest in a piece of real estate, such as part of a
tenants-in-common partnership.
* Buy a leftover house in a new-home development. |
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| Q: |
How can I
improve the value of my property? |
| A: |
The
biggest factor outside of a homeowner?s control is market conditions.
But other issues -- including the condition of the property, specific
home improvements and neighborhood stability and safety -- can influence
property values.
The greatest rise in home prices occurs when the economy is strong
and the number of home sales is increasing. Though markets vary, that
has occurred twice in recent history -- in the early 1970s and the late
1980s.
Specific home improvements can increase the value above the cost of
the improvements. According to Remodeling magazine, which publishes an
annual "Cost vs. Value" remodeling report, a remodeled
bathroom returns 81percent to the owner, a bathroom addition, 89 percent
and a master bedroom suite, 82 percent. Remember, quality pays.
Well-planned and well-executed remodeling jobs are a good investment
while bad work seldom enhances value or livability.
The safety and security of a neighborhood can affect property values,
too. If you live in a high-crime area, an organized community watch
program not only will lower the crime rate but give home values a boost,
too.
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| Q: |
What kind of
return is there on remodeling jobs? |
| A: |
Remodeling
magazine produces an annual "Cost vs. Value Report'' that answers
just that question. The most important point to remember is that
remodeling a home not only improves its livability for you but its curb
appeal with a potential buyer down the road.
Most recently, the highest remodeling paybacks have come from
updating kitchens and baths, home-office additions and extra amenities
in older homes. While home offices are a relatively new remodeling
trend, for example, you could expect to recoup 58 percent of the cost of
adding a home office, according to the survey.
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Copyright 1999 Inman News Features
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