Determining the value of a home can be a tricky job, but it is crucial in both buying and selling a home. Here's a step-by-step guide to get you started.
Orientation and preliminary research
The first step in the valuation process is to do preliminary research. This means gathering information about similar properties in the area, learning about the current real estate market, and possibly doing online value calculations beforehand. This information will give you a rough idea of what to expect.
Choose the right appraiser
For an official valuation, you need a certified appraiser. It is important to choose someone who is familiar with the local market and has good references. The appraisal report prepared by this person will be recognized by banks and other financial institutions.
What does an appraiser look at?
An appraiser considers several factors in arriving at a valuation. These include state of repair, size and layout of the home, quality of insulation and materials, and location. In addition, the appraiser may consider local developments, such as planned construction projects in the area that may affect the value.
Receive the appraisal report
After the appraisal, you will receive a comprehensive report containing the appraised value and its justification. You can use this report for applying for a mortgage, but also as a starting point for negotiations when buying or selling a home.
Set asking price or bid
With the appraisal report in hand, you can now set an informed asking price if you want to sell your home. As a buyer, the report allows you to make a realistic offer. Remember that the appraised value and market value can sometimes differ. This is because the market value depends on what buyers are willing to pay.
Extra tip: periodic revaluation
The value of a house is not static. Therefore, it is advisable to have a new valuation performed every few years, especially if you are considering selling your home or looking to refinance.
Valuing a house is a detailed process consisting of several steps. A properly performed valuation by a licensed appraiser is extremely important, both for the buyer and the seller. By properly orienting yourself, hiring a knowledgeable appraiser and understanding how the value of your home is arrived at, you are taking an important step toward a successful purchase or sale.
