Are there standard ways to determine a home's value?
Q: Are there standard ways to determine a home’s worth?
A: Yes. A comparative market analysis and an appraisal are the two most common and reliable ways to determine a home’s value.
Your real estate agent can provide a comparative market analysis, an informal estimate of value based on the recent prices of other similar properties in the neighborhood. Reviewing similar homes that have sold within the last year along with the listing, or asking, price on current homes for sale should prevent you from overpaying.
A certified appraiser can provide an appraisal of a home. After visiting the home to check such things as the number of rooms, improvements, size and square footage, construction quality, and the condition of the neighborhood, the appraiser then reviews recent comparable sales to determine the estimated value of the home.
Lenders typically require an appraisal — which run between $200 to $300 — before they will approve a mortgage loan. This protects the lender by ensuring the home is worth the money you want to borrow.
You also can check recent sales in public records, through private firms, and on the Internet to help you determine a home’s potential worth.