What's Your House Worth?
Every thinks that they know what their property is worth. Going through the process of having an appraisal or looking at the market and deciding how much your house is worth compared to others is all well and good, however in reality your house is worth the amount that someone is willing to pay for it. Everything else that you may do to come to your valuation is really an estimate.
Having said that your house is worth whatever the price someone wishes to pay for it, it is still a good idea to gauge an accurate value before accepting the price offered to you. Knowing what you think your house is worth and the price that someone offers will give you room for negotiation.
Determining Property Value
To settle on their propertys value, most people follow one of two main routes. They either get an appraisal or, with help from their realtor or broker, produce a comparative market analysis.
If the owners of a property decide to go for an appraisal they will hire an appraiser to carry out an inspection their property. An appraiser is a certified professional who uses a number of factors to come to a decision about the value of a person's property.
Appraisers normally use their opinion, judgment and experience to perform a thorough and comprehensive assessment of a home. Together with other major factors that can include: property size and square footage; condition of the home; neighborhood environment; comparable local sales; relevant historical information (including renovations and extensions); sales performance future value forecasts; and the proximity to desirable schools and services, to arrive at their conclusion as to the actual monetary worth of your property.
A typical appraisal will cost around $300 for a $250K home, with prices for other homes comparable to this.
Comparisons
If a seller chooses to derive how much their home is worth undertaking a comparative market analysis then they will look at houses of similar stature to their own, and the prices that they command. The market analysis will take in to account the current real estate market trends, prices and other items to arrive at the 'market value' of the property
Market value is comparable to an appraisal, but a qualified house evaluator doesn't carry an examination of the property. This market value will express how much your house is worth, compared to similar houses, in and around your area..
Carrying out a comparative market analysis acts as an informal estimate of your property's market value, based on sales of equal properties, performed by a realtor or broker.
Selling At A Loss
Home ownership is one of the greatest feelings in the world. It is a sign of elevated social status and gives the impression that you are financially stable. However, buying a home is an expensive act. The initial payment in addition to regular mortgage payments can be a financial drain. Although most individuals are financially prepared for this monetary burden at the time that they purchase a home, events such as sudden financial difficulty on your employer may force you into a precarious financial position.
Consequently, it is an important issue to understand how the principle of selling at a loss applies to real estate. A consistently growing industry, it is usually uncommon for a homeowner to sell their home for less than what they had paid for. Property is a human necessity and will always be a consistent investment.
However, there may be instances where you have to sell your home at a loss. In cases where you are unable to pay off your mortgage payments on a consistent basis, you may be forced in some unfortunate situations. There may be times where you may have to sell your home for less than its mortgage in what is called a short sale. This action is complicated and stressful. Worst of all, it is only a temporary way to alleviate financial troubles, as a homeowner will be able to pay off the bulk of their mortgage through the sale of their home.
Although this option may sound bad, there are worst options. Having your property be foreclosed means that your share in a mortgaged property has been legally revoked due to missed mortgage payments. The property is then sold at a public auction and you will find that very few situations wreak as much havoc on an individual's personal credit history as a foreclosure.
However, selling your property at a loss is not the end of the world. Usually it is indicative of some financial trouble that occurred through very little fault of your own. It is an unfortunate situation that individuals find themselves in, but it is possible to bounce back and reenter the wonderful world of home ownership.
