Many agents do not take into consideration the art and science of valuing a home. Most agents merely punch CMA, which gives them the averages, the highs, and lows. There are many issues that cause the home to appraise. We will discuss some of the issues of valuing a home.
This home was listed for $350,000. And we offered $360,000, which exceed the listing price. And we won the offer. My analysis resulted in the price range of $360,000 you $364,000. The appraisal came in at $362,500.
We also look at appreciation. We go back to the original date it was sold and apply the appreciation rate. Based on the condition of the house the appreciation will vary.
Age of the Home
One of the rules for appraising property is to have comps that are within five years of the subject property. This means if the subject property was built in 1990 that comps should be built from 1985 to 1995. In addition, the square footage of the comps needs to be with 10% of the subject property. This means the subject property is 2,500 square feet, the comps should be between 2,250 and 2,750.
The Condition of the Home
Category A: These are the homes that are selling for higher prices. In a typical subdivision, there will be a small range in this category. This category will represent those homes that generally have no deferred maintenance and will have been upgraded. Upgrades in this category will consist of more than just the roof, HVAC, and painting, but will also include kitchen renovations, bath renovations, new appliances, and generous hardwoods as well as good curb appeal. The normal reaction to these homes is WOW.
Category B: These are the homes that are selling for prices in the middle range of the subdivision. This category will also have a small range of prices. Inclusive in this category are homes that generally have no deferred maintenance and have been maintained. In this category of well-maintained homes, you should not find homes in need of painting, roofs or heating and air. Additionally, the upgrades associated with Category A are usually absent. The normal reaction to these homes is NICE HOUSE.
Category C: These are the homes that that are selling in the low range for the subdivision. This category will also have a small range of prices. This category typically consists of homes that have not been upgraded or well-maintained but are in some state of disrepair. These homes generally need interior and exterior painting, flooring, roof, cabinetry, appliances, heating and air and yard work. Additionally it is not uncommon for small problems to have become big problems; for example plumbing leaks, roof leaks, drainage issues and so on. The normal reaction for these homes is either NO WAY or THIS LOOKS LIKE A DEAL.
Van Purser and his wife Jeanne are a licensed Real Estate Brokers in Georgia. Since1984 they successfully purchased and renovated over 400 homes. Their expertise is in representing Buyers or Sellers as an advocate; which means always ensuring their best interest. Additionally, they represented hundreds of clients over the years as an Associate Broker with Metro Brokers, RE/Max and now with his own firm. He and his wife, Jeanne, have been married since 1977. Van or Jeanne can be reached at 770-623-3313, or by email at email@example.com or firstname.lastname@example.org.
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