Q & A: Appraisals & Market Value
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A home’s value can be determined using multiple techniques.
- CMA: Prior to listing your home, a real estate agent will perform a Comparative Market Analysis (CMA) which estimates the value of your home based on recent sales of similar homes your area.
- Appraisal: Lenders require that an appraisal be performed prior to closing to ensure the home’s value is not less than the loan amount. Appraisers also base their estimates on prior sales in the area, square footage, location, and home features and upgrades.
- Assessment: Assessments are periodically performed on homes by local governments to evaluate the home’s property taxes. Since property taxes are based on property value, features such as location, size of lot, age of home, and home condition are factored into the assessment.
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