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.
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.
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.
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.
Q:
Should I add on or buy a bigger home?
A:
Consider these questions before
making a choice between adding on to an
existing home or moving up in the market
to a bigger house:
* How much money is available, either
from cash reserves or through a home
improvement loan, to remodel the current
house?
* How much additional space is required?
Would the foundation support a second
floor or does the lot have room to
expand on the ground level?
* What do local zoning and building
ordinances permit?
* How much equity already exists in the
property?
* Are there affordable properties for
sale that would satisfy housing needs?
Ultimately, the decision should be
based on individual needs, the extent of
work involved and what will add the most
value.
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.
Q:
Where do I get information on housing
market stats?
A:
A real estate agent is a good source
for finding out the status of the local
housing market. So is your statewide
association of REALTORS®, most of which
are continuously compiling such
statistics from local real estate
boards.
For overall housing statistics, U.S.
Housing Markets regularly publishes
quarterly reports on home building and
home buying. Your local builders
association probably gets this report.
If not, the housing research firm is
located in Canton, Mich.; call (800)
755-6269 for information; the firm also
maintains an Internet site. Finally,
check with the U.S. Bureau of the Census
in Washington, D.C.; (301) 495-4700. The
census bureau also maintains a site on
the Internet. The Chicago Title company
also has published a pamphlet, "Who's
Buying Homes in America." Write Chicago
Title and Trust Family of Title
Insurers, 171 North Clark St., Chicago,
IL 60601-3294.
