Whether you are planning to sell your home in the near future or just want to know what your home’s current worth is (in case you might consider selling some time down the line), there are two separate but equally important concepts you should be aware of: appraisals and market value in Naples.
While it may seem like these two concepts go hand-in-hand, they are quite different and can each affect your home’s value when listed on the real estate market. If you are not aware of the difference or have not considered that there is a difference between them, you are not alone. That is why our team at Your Home Sold Guaranteed Realty - The Cachon Team has put together this guide to help you more fully understand the concepts and make sure you know how they may affect your home’s overall worth in the current market.
What Is an Appraised Value?
The first thing to understand about a home’s appraised value, or an appraisal, is that it is usually required by a financial institution through which a home buyer is hoping to obtain a mortgage loan. It is typically the home buyer’s responsibility to pay for the appraisal because it is part of the overall home buying process.
So, what is the appraised value? It is a determination of the worth of a home as assessed by a state-licensed appraiser, who is also a real estate professional. To figure out the value, the appraiser will use price data from recent sales of properties in your area as well as other important factors such as:
- location of the home
- square footage
- size of the property
- upkeep of the landscaping
- number of bedrooms and bathrooms
- age of the home
- its overall condition and curb appeal
- unique interior design
- condition of the house’s major systems (plumbing, HVAC, electrical) and appliances
Once all of these factors have been incorporated, the appraiser can determine the house’s intrinsic value. The reason that banks and other financial institutions request these appraisals is to ensure that they are not extending loans to home buyers for more than the home is actually worth. It is a safeguard for their interests.
What Is Market Value?
On the other hand, market value is a much more subjective determination of the worth of your house. Basically, it is the actual amount of money that home buyers will be willing to pay for the house when it is listed on the current local real estate market. The market value is not necessarily determined by the appraisal that was completed, and it can be more or less than the bank’s appraisal. In general, a more competitive market will lead to a higher market value.
Importance of Knowing the Difference between Appraisals and Market Value in Naples
So, now that you are familiar with the difference between appraisals and market value in Naples, why is this information important to you? That is an excellent question.
As a home seller, you should be aware of what home buyers are willing to pay for your home, given the current market conditions (market value). If you list your home at a price that is too high above market value, home buyers will simply pass by it and move to the next one on the list. This could result in you losing out on time and money while your home sits on the market until you make the decision to reduce your asking price.
Home buyers need to understand this difference because the appraisal will likely be needed before they are able to actually get the loan for a home in which they have interest. If the appraisal comes in higher than you have been approved for, your lender is unlikely to give you an increase in the loan.
Understanding appraisals and market value in Naples can be tough, and that is why our team at Your Home Sold Guaranteed Realty - The Cachon Team is here to answer your questions and guide you through the real estate process. We know how challenging it can be to learn new terms that seem to be the same or related, so we work diligently to make sure you are not confused by any of the terms you hear and truly understand how all of this information will affect your real estate goals.
Our Experienced Realtors Can Help You Understand How Your Home Is Affected by Appraisals and Market Value in Naples
If you are looking to buy or sell a home, it is important that you are familiar with and understand the impacts of appraisals and market value in Naples. These concepts, and many more, may be new and confusing to you, so our team at Your Home Sold Guaranteed Realty - The Cachon Team will happily provide you with the information, resources, and tools you need to feel comfortable and confident with the entire real estate process.
To get more information about appraisals and market value in Naples or to start your real estate journey with us, feel free to give us a call at (239) 399-5432 or fill out the form below with the requested information. We look forward to hearing from you!