We will concern ourselves with the latter term, appraisal. It is a certification by a licensed professional that house is worth a certain amount based on comparable sales. Remember this based on someone else’s opinion. The actual market value is the amount a buyer is willing to pay for which a seller is willing to sell under normal circumstances.
“This term is used interchangeably with professionals in the industry and sometimes confuses novice investors. Imagine you have a home in DC that has been on the market for several months. There are several factors you must consider before assessing the market value,” said Eric Skeeter, Pillar Property Group.
When the market is stable, homes in the DC sell within a few weeks. In this current market, there are many factors to consider in how well a home sells in the DC region. These can include condition, location, and layout of the house.
“Real estate brokers have a tendency to list the properties high than the true market value in the hopes of pleasing the seller and creating unrealistic expectations about the property’s value to the seller,” said Skeeter.
Does this make real estate brokers the bad guys? No, they get their information from other brokers, the sales data of homes in the neighborhood, information from neighbors and recent appraisals.
“I would investors to do their homework to determine the real value of property,” said Ian Johnson, Pillar Property Group.
The topic of property is often its own best “comp.” This means the final sales price agreed upon between the buyer and seller. Generally, this determines the true market value of the property.
“I would advice the beginning investor to only listen to real estate brokers, appraiser, and mortgages. They need to do their own homework when considering an investment property. Also, they need to remember the actual selling price will determine the property’s value,” said Skeeter.
For more information on property investment, please visit pillarprodeals Web site.