Christian Real Estate Professionals

Determining Value In Real Estate...Made Simple...!!!

I will try very hard to make a complex issue simple...How to determine the value of real How do I know the true value of real estate...???estate...!!!  

The very curt, over-simplistic, and minimalistic answer is: A property is worth whatever a qualified purchaser is willing to pay!  

Now let's carve this issue up into little bite sized pieces...  

Many terms are thrown around which confuse the matter, but a brief explanation of several terms should clear the air and enable us to see through the 'fog'...  

Let's start with MARKET VALUE...the value upon which a qualified buyer and a willing and able seller agree...!  

APPRAISED VALUE...the value which a certified and qualified appraiser determines the property is 'worth'...Although the appraised value is based on recent data and established principles, this value can vary depending on whether the appraisal is being done for a seller, an estate, a buyer, a mortgage company, a lawyer, etc.  

ASSESSED VALUE...the value upon which property taxes are determined by the local county or municipality...the assessed value has no real 'direct' relationship to actual market value...but serves only to establish a basis for the calculation of property taxes...often this value can be a half, a quarter, or even much less than the actual market value...In our area, most counties have what is known as a 'common level ratio'...this number is a factor that when multiplied by the assessed value is 'supposed' to approximate the fair market value...but because of escalating and declining property values, and because in our area the county is not permitted to 'spot assess'...assessed values can be very misleading and grossly over or under exaggerate market value...the only remedy is a countywide reassessment which can be costly and impractical...  

What's my property worth?Sooo...to sum up...  

When you're in the market to buy or sell real estate you ought to demand the services of a highly trained professional to guide you through the course...  

Bottom line, however...The seller 'rarely' feels they're getting enough and the buyer 'usually' feels they've paid too much...  

Human nature always wins the day...!!!

 

 

8 comments • Fran 'The Title Man' Gaspari Title Insurance-PA & NJ • August 18 2009 11:00AM