MARKET ANALYSIS

There are two types of market analysis typically used today.

     1. On line instant value

     2. Prepared report by a local agent

These types of reports are usually free and the easiest to get.  

The danger is mostly in the on line valuation without the assistance of a licensed agent. Even Zillow discloses that the zestimates can be inaccurate and should not be solely relied on.  

If you have the report prepared by a local licensed agent, they can give you more details on why you home would be above average , just average or below average.  They know the area, they have been inside the homes you see on your report, and they can visit your home and give you an honest unbiased opinion.

The online instant report is usually done if:

1. You are just curious

2. Your neighbor just did something

3. Your'e thinking about selling

4. You want access to equity     

The agent prepared report is usally when the owner is closer to selling thier home, and the real numbers matter more, and they meet the agent in person at the home to review it. 

With the agent's assistance, the value reflects what the final sales price may be before presenting it to the market.  Only after it is exposed to the market will the real market value be known.  This valuation tends to be the highest projected price.  

BROKER'S PRICE OPINION

A broker price opinion report has more detail and the person preparing the report has at least driven by and took a front photo of the comparables homes in the report and have a checklist of items they must complete on the subject home in order for the report to be accepted.

They have been used in the past by banks that owned property in the crash starting in 2008.

They are also accepted by some legal, tax, or financial institutions for special circumstances, including stepped up tax basis or probate when a divorce or death has occured. The values here usually refect a previous date's value, not current market value. Some however will need an appraisal done and won't accept a "BPO".

These reports can cost between 150.00 to 200.00 dollars depending on the criteria and location of the subject home.     

APPRAISALS

There are different types of appraisals types used to establish values. The "comparable sales approach" will be discussed here.  The two most common are:

     1. Full Appraisal

     2. Desk Top Appraisals

The full appraisal can be used for many purposes by different people.

1. Sellers in preparation for listing a home

2. Buyers lender during a home purchase

3. Legal and tax professionals

4. Government agencies    

Full Appraisal

This report is the most detailed and has parameters a licensed appriaser must follow.  It needs to be able to withstand any legal proceeding that is in process or could occur in the future.  It's several pages long and gives detaild photos and values for spcefic features, upgrades, condition and  market trends of a community.

It takes about a week to prepare and fees start at about 650.00 dollars.   

It's most commonly used by lenders in home purchase  to protect the lender from over lending based on the LTV (loan to value ratio). The buyers down payment and projected LTV at close can affect the loan approval despite the appraisal report. 

Keep in mind, It does not always reflect what the buyer is willing to pay, or what a  pay for the home.  If the right situation occurs the buyer may ignore the appraisal and pay a higher price for the home, or the buyer could decide the market value lower than the appraisal and could challenge it. 

Desk Top Appraisal

This is most commonly used by lenders in the refinancing of a home or setting up an equity line of credit.  It's the first look at it. Depending on the type of loan or the value in the desk top appraisal a full appraisal may be needed or could be waived because the equity position after the loan is very strong.   This is at little or no cost depending on the lender, and takes just a couple of days.