The Differences Between Homeowner Estimates and Appraised Values
As a result of low inventory and high demand, home values are steadily increasing. In fact, home values have increased 3.89% year-over-year, and experts are predicting that they could appreciate by another 5%+ over the next twelve months. Unfortunately this is a trend homeowners may not see reflected in their bank appraisals, as indicated by a recent research showing that appraised values were about 1.5% lower than homeowner expectations throughout the country. Long Island mortgage company Cliffco explains why.
Homeowners may have an inflated sense of their home’s worth.
It’s very important that you pay close attention to your local market in order to get a realistic idea of your property’s value. Most people aren’t aware of how varied the housing market can be. Despite what you’ve heard about rising home prices, it may not be the case in every area. Home values in each neighborhood throughout the country move in different directions based on local factors. When researching your local market, consider the prices of homes that have recently sold instead of the asking price of those currently on the market.
A rapid surge makes it difficult to obtain adequate comparables.
When appraisers assess the value of a home, they take into account the sale prices of similar homes in the area. But with property values rising at an accelerated rate and home sales lagging due to lack of inventory, it becomes challenging to access a sufficient number of recently sold homes that are comparable to the subject property. Area homes that sold six months ago at a certain price may sell for a higher amount today.
Value is subjective.
Always keep in mind that there is no exact science behind determining a property’s worth. The truth is a home is worth whatever someone is willing to pay for it. If you are thinking of selling or refinancing your home in the near future, contact Cliffco Mortgage Bankers to speak with a knowledgeable representative about what your home might be worth.
For more information on estimates and appraised values contact Cliffco Mortgage at (516) 408-7300.