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Market Analysis vs. Appraisal:
In the mid 90's when the S & L industry bale out. Next came
congressional hearings. The result was the Financial Institutions Reform, Recovery, and Enforcement Act.
Before this legislation basically anyone calling themselves an appraiser could do
appraisal work for banks, property owners, and the like. This paved the way for lots of corruption.
Now appraisers must be licensed, must have completed minimum training and
maintain ongoing training as well.
So when you get an appraisal, you are hiring a licensed appraisal company to render an opinion of value using data they believe to be objective and relevant to the subject property.
Some Basics:
Market Analysis:
An opinion of value report that is provided by a realtor who is not necessarily licensed to do appraisal work. For the typical residential property, both the appraiser and real estate agent or broker will use the "comparable sales" approach to value. That means that they are both endeavoring to use similar properties from the subject neighborhood or similar neighborhoods and are making value adjustments on each based on its similarity with the subject.
The appraisal puts it reliance on closed sales (comps) usually
within a 6 month period from the date of the appraisal.
Realtors for Market Analysis reports will use comps as well as pending
sales and actively marketed properties to help show recent trends in value. Market change is constant, it can be of tremendous help to prospective sellers to see if a market is
trending up or downward in value.
The number of active listings
versus the number of recently pending sale properties can be very instructive to a seller questioning supply and demand. Lots of pending sales and only a few similarly priced active properties may be a sign that demand is way up. If there are dozens of homes for sale and only a few are pending, a seller would be better off to consider price positioning their home on the lower side to be more competitive.
Broker Priced Opinions is a estimate of reasonably equivalent value given by realtors to banks disposing of foreclosures.
So an appraisal is typically used by the lender in a transaction and the Market
Analysis is used by the seller before they come to market.
If you need some advice on the value of your home or would like some tips and
suggestions on how to get your home showing it's best, why not give us a call.
We can show you how to realize thousands more in a sale
by doing the simple, inexpensive things that so many sellers forget. Our Market Analysis reports and about 30-40 pages long, are quite detailed and are free.
There is never an obligation. Why not give us a call today.
Request Seller Representation Quick online form
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