How much is your property worth?

MARKET ANALYSIS

Comparative Market Analysis

A Comparative Market Analysis (CMA) is a tool used by real estate agents to value a home. It evaluates similar homes that have recently sold in the local area. Agents find comparable sales and use them to conduct a sales comparison. In most cases, an agent will find three to five homes that have recently sold and are as similar to and located as close as possible to the home being valued. Each one is then analyzed to pinpoint differences between it and the subject property. Once these differences are priced out, the price of each comparable is adjusted to see what it would cost if it was identical to the home being valued were it to be sold in the current market.

APPRAISALS

An appraisal is an unbiased valuation of a home based on of a third party's professional’s opinion (oftern times commissioned for and by a bank/lender). They are usually what mortgage companies use for home purchases and refinances. A lender usually orders a home appraisal.  The cost of the appraisal, sometimes up to $500, is paid for by the homeowner. An appraiser does a complete visual inspection of the interior and exterior of the home as well as taking into consideration recent sales of similar properties and market trends. The appraiser then compiles a detailed report on the home, including an exterior building sketch, a street map showing the home and any comparable sales, photos of the home and street, an explanation of how the square footage was calculated, and any other relevant information.

REFINANCING

Lenders base the amount of their loans on the value of your property and usually allow you to borrow a maximum of 75% to 96.5% against your property. Knowing what your home is worth allows lenders to calculate your equity in the home. The more equity you have, the better terms you will receive on your refinance.

HOME IMPROVEMENTS

If you’re doing home improvement projects to increase the resale value, you want to make sure you’re not pricing it out of the market. If your home is already priced on the high-end for your community, making too many improvements could make it more difficult to sell. A home valuation will both give you a sense of where your home stands within the market and assist with your home improvement decisions.

QUALIFYING FOR CREDIT

If you want to borrow cash against your home, getting a Home Equity Line of Credit (HELOC) could be a good option. To qualify, you must have a certain level of equity in your home. Most lenders require at least 20%. Getting a home valuation will help you determine if you qualify and will be used by the lender to make a decision on your loan.

PLANNING

Though it’s not a necessity, simply knowing the value of your home is good information to have. It will help you plan for the future and deal with unforeseen circumstances when you might be in a position that requires extra money or a quick relocation. Knowing how much equity you have in your home and how much you may be able to borrow against it or sell it for will help you respond to any financial curveballs that life throws at you.