Finding the Best Comp in Your Own Home

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs

An appraisal identifies a form of certification offered by licensed professionals indicating the value of a house. One can get certification on the price of a house from professionals who are licensed, an opinion that is based on comparison of others property sales in the area. The value of a house however is a dictate of the price that a buyer is willing to pay and the price that sellers are willing to sell the houses in market equilibrium.

It is important for an investor to understand what the dictates of market value are. For instance, a person may put a house on the listings for a number of months within which he fails to get any offers. One may assume that the house is overpriced. Other factors that could be part of the problem include the location of the house, the condition of the house as well as its layout. These factors are however already considered when setting the price of the house. This means that if well priced the house should sell within the normal period as neighboring houses.

Real estate brokers often take listings that are highly priced in comparison to the current market prices for the properties in order to compete for listings. The brokers do this with full knowledge that they are not likely to fetch the high prices set by the sellers. An investor however, cannot blame the sellers for the high prices of the property. The sellers arrive at the price for their property by considering the information they get from recent appraisals, brokers as well as the prices at which homes have been sold. The investor should therefore evaluate the information available to them in order to determine the property’s true value.

In this business, the property sets its own market value since the price that is agreed upon by the real estate buyer and seller becomes the real value of the property. This price is not affected by opinions of persons such as the brokers and the mortgage brokers. An investor who has no experience in the real estate business is likely to be trapped such that they do not bargain for any discounts that could be available to them. They are likely to fall for the high prices given by brokers based on current appraisals.

An investor should also be on the look out for motivating circumstances. They should realize that once the market value for a house has been set by a sale, the value of the property has already been set and no appraisals done later can change the value of the house. One should therefore ensure that the appraisals they consider when purchasing a house should be those done prior to the sale of the house and not after. An investor is advised to look at the history of sales of the property they wish to purchase when comparing with previous sales. The history will give details such as previous listings on the house as well as any previous sale. These details will enable one to determine the real value of the property.