VACAVILLE, CA, Mar 28, 2024—While there are several methods for determining what a home is "worth," when it comes down to it, a home is ultimately worth what someone pays for it, explains Stephen Spencer, Bev Dorsett & Sue and Steve Kappel, Broker/Owners of Coldwell Banker - Kappel Gateway. Everything else is really an estimate of value. "Take, for example, a hot seller’s market when demand for housing is high but the inventory of available homes for sale is low," explains Sue and Steve Kappel. During this time, homes can sell above and beyond the asking price as buyers bid up the price. The fair market value, or worth, is established when “a meeting of the minds” between the buyer and the seller takes place.
That said, there are several methods for determining what a home is worth.
"A comparative market analysis and an appraisal are the two most common and reliable ways to determine a home's value," says Sue and Steve Kappel.
Your real estate agent can provide a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties. Reviewing comparable homes that have sold within the past 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," says Sue and Steve Kappel.
Lenders normally 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 can also check recent sales in public records, through private firms, and on the Internet to help you determine a home’s potential worth.
For information on real estate, please contact Coldwell Banker - Kappel Gateway at info@kappelgateway.com, 707-427-5344, or Coldwell Banker - Kappel Gateway.