Process, Resources & Tools

What's The Value Of A Property You Are Considering Buying?

A ten-dollar bill is worth $10 regardless of if it’s crisp and brand new, or if it’s twenty years old, dirty and torn. Neither its condition, the condition of other dollars bills, nor its location will change its value! If the value of real estate was also this precise and exact, just like the value of a dollar bill, then there would frankly be no need for real estate agents! However, accurately evaluating the value of a house, townhouse, or condominium is a complex calculation that leverages years of experience and expertise like Mitch has, as one of the Top REALTOR's in the Greater Indy area!

• COMPARATIVE MARKET
  ANALYSIS (CMA)
  When Done Correctly
  It's The Most Accurate

  Comparative Market Analysis (CMA)

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  This is an indication of the property’s value based on a detailed and adjusted analysis of the 4-6 most relevant and similar properties that have recently sold in your development and/or nearby. 

  A CMA should also increase or decrease the value based on the current market conditions including, interest rates, and the supply and demand at that moment in time. Most real estate agents will perform a CMA before listing a home for sale and great Buyer’s Agents will also complete a CMA when working for a buyer who is considering submitting an offer on a property.

• APPRAISAL BY
  LICENSED APPRAISER
  Value Based On The
  Lender's Perspective

  An Appraisal

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  State-licensed appraisers will walk through a property and write an official appraisal report. While appraisals offer a little protection for buyers regarding the value of a property, the customer for the appraiser is the mortgage lender not the buyers. Banks typically require appraisals when refinancing your home, or getting a mortgage for a new home, to minimize the lender’s risk by making sure the bank is loaning no more than what the property could be resold for if the buyer was unable to repay their mortgage loan.
• INSTANT ONLINE
  HOME VALUATION
  Easy, Fast, Free, &
  Rarely Accurate

  Instant Online Value Estimators

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  These are easy, convenient, and, best of all, free. There are many real estate and lending websites offering estimators out there. You can use this if you want a general estimate of your home may be worth. While these can help you decide if it’s worth considering selling or refinancing, these sites tend to dramatically undervalue or overvalue property values. So, using these when selling or purchasing a new place could create unrealistically high or unreasonably low expectations that could cost you thousands of dollars as both a seller or a buyer!

• SALES PRICE PER
  SQUARE FOOT
  The Most Widely Used
  And The Least Accurate

  Price Per Square Foot Calculations

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  Price per square foot calculations are often used by sellers, buyers and unfortunately even by some real estate agents to determine the value of a property in comparison to other recent sales. This approach divides the sale or list price by the above ground square feet to arrive at a price per square foot.

  If you are comparing to identical floor plans, with identical finishes and features, built at the same time, by the same builder on lots next to each other and both places have continued to have identical updates, then this approach might yield a meaningful value. However, this is rarely the case since price per square foot calculations do not reflect the many differences in properties like, bed and bathroom configurations, land value and location, garage spaces, finishes, updates and improvements, the year the place was built or any of the hundreds of differences between homes.

The 4 Most Commonly Used Ways To Determine Value, From The Highest Level Of Accuracy (4 stars) To The Least Accurate (1 star)