When you are selling a rehabbed property it is important to use solid real estate comps to be sure you get the best deal for your time and effort invested. You should be sure to account for changes in market value and what the appraisal value may be calculated as. Let’s look at the two and discuss exactly what they entail.
Get to know Market Value vs Appraisal Value
Market value can be defined as the highest price a buyer is willing to pay and the lowest price a seller is willing to accept on a particular piece of property. Market value is usually not the price the property could have been sold for, but is the price the property is sold for. Several factors influence market value. These are location to a good school district, well fitting additions to the existing house, well-maintained neighborhood, and the house not being over improved or the largest house on the block.
Appraisal value is defined as the opinion of a qualified appraiser, based on the knowledge, experience and analysis of the property being sold. A thorough property appraisal generally looks at factors which may benefit the seller to become acquainted with. These factors include the current market value for same type home, in same condition and in the neighborhood of the property. Also take note of market changes and the demand for the style of property.
Getting a thorough appraisal offers many advantages to the seller as well as the buyer.The difference between market value and appraised value can be simply explained based on the definition of each term. The market value of a property, based on the buyer, is the price the market is willing to pay for the property in question. The appraised value is the unbiased value of the property after a qualified appraiser has completed an inspection on the property.
In the sometimes fast paced real estate investment field it’s good to have firm knowledge of the basics. I hope this detail of these two terms are helpful in your day to day business deals. Please leave us a comment by clicking the tab and share an example of how these two terms came into play on a previous real estate deal.
