If you’re considering selling a property, the question you’re probably wondering is, “How much is my property worth?”
There are two ways of answering this question. One is a comparative market analysis (CMA). Another is with an appraisal. A comparative market analysis determines what the likely sales price of your property will be. An appraisal determines how much money a bank is likely to loan a buyer to buy your property.
When a bank underwrites a mortgage, the underwriter must guarantee that if the buyer defaults the bank won’t own an asset they can’t break even selling. The appraisal assures the lender the asset is worth the value of the mortgage. But if a buyer pays with cash or makes a substantial down payment, the purchase price of a property could be higher than the appraised value.
Appraisals tend to be conservative. Often the market fetches a higher price than the value an appraiser assigns a property. Sellers should know the likely appraisal value of their property before listing so they can price their property accordingly.
If you know the appraised value of your home is $750,000, but the market value is $800,000, you might list for $810,000 to give yourself negotiation room. If a buyer makes a full price offer but only plans on making a 5% down payment, you know from your appraisal this buyer will not be able to get approved for a mortgage. You wouldn’t want to accept that offer, but instead, hold out for a buyer with a higher down payment.
At Jamaica Estates Realty, we want to maximize your success. We offer free appraisals ($500 value) for evaluation purposes prior to listing.
If you’d like a complimentary property appraisal, contact us at (718) 380-5000 today!