There are many factors to consider prior to putting your home on the market. Your selling price should be based on comparable home values in your area.
One of the most practical ways to find the value of your current home is to have a traditional appraisal. The process can give you an accurate account of your home and its value as well as some hidden problems that you may not have been aware.
Be aware that you don’t want to depend upon your real estate professional to the sole decision maker when it comes to the price you will be asking for your home. Your home will sell more quickly if it is priced correctly. You could lose money if the price is set too low, or not sell at all if the price is too high. Arriving at the equitable market value for your home is crucial to selling your home.
Arriving at a realistic price for your home is a lot easier with a professional’s advice. You can obtain this information from First American Title’s Centralized Customer Services group at (800) 771-1220. They will be happy to provide you with comparables in your address and can provide you with property profile information on your home.
The appraisal process consists of several steps. The following are the major steps in the sequence normally followed by appraisers:
Research the subject property as to size, bedrooms, baths, year built, lot size and square footage.
Gather data of recent sales in the subject’s neighborhood. The appraiser needs to locate at least 3, preferably more, similar-sized homes that have sold and closed escrow in the neighborhood. The homes should be within one mile of the subject property and sold within the past 6 months. These homes are considered the “Comparable Properties”, or “Comps” for short.
Field inspection consists of two parts: First, the inspection of the subject property; and second, the exterior inspection of the comparable properties that have been selected to estimate the value of the subject property.
The subject inspection consists of taking photos of the street scene, front and rear of the home that may include portions of the yard. The appraiser will make an interior inspection for condition noting any items that would detract from or add to the value of the home. He will also draw a floor plan of the home while doing the inspection. The inspection of the comparable properties is limited to an exterior inspection.
For features that cannot be seen from the street, the appraiser has reports from Multiple Listing Services (MLS), California Market Data Cooperative (CMDC), county public records and appraisal files along with other sources to help determine the condition and amenities of the comparable.
After the field inspection has been completed, the appraiser must determine which comparable properties most resemble the subject, making slight adjustments in value for any differences between them. After making the required adjustments, the appraiser will go through the reconciliation process with three comparable properties to determine a final estimated value. This method of estimating value is called the “District Sales Comparison Approach to Value” and accounts for nearly all of the considerations in determining value of single family homes.
An appraiser will call in advance to set up an appointment. At that time, offer to supply any information about the home’s size, number of bedrooms, bathrooms, pool, enclosed patio, etc. The more that is known about the property prior to the inspection, the better the appraiser can focus on researching the most similar comparable. “Doing your homework”, will maximize your chances of having a good appraisal.
While your home is being inspected, do not follow the appraiser from room-to-room causing distraction. Instead, allow the inspection to go smoothly. In the event the appraiser has any questions, be close by to answer them. The time to mention the things you think are important is either before or following the inspection.
