How Does An Appraisal Work?

[GoPhils]

Originally Posted by JONOV

Would you be competing against new construction?

So could an appraiser use new construction as a comp for a resale?

[BoBromhal]

they don't want to. If they had to for whatever reason (after all, the OP's house is < 2 years difference), then ...

They'd certainly try to derive whatever premium that new homes (or hey, it could be the older homes) are selling for and take that off his house.

[dblackga]

Two methods to explore:

1. Interview several real estate agents and ask them what they feel the market value of your home is in this market. You can get a pretty good feel for how professionals view the value of your home from these market analyses. Advantage: It's free, just your time interviewing Realtors. Cons: While Realtors generally come pretty close to market value, it's not an "appraisal".

2. Hire a reputable appraiser to prepare a full appraisal. Advantage: A one-shot transaction from an independent professional who isn't trying to get your real estate business down the road. Cons: Cost money ($450-$1,500, depending on the size of your home and the difficulty of the finding comps).

Keep in mind that both methods are using comps going back six to twelve months from the time the market value is calculated. If you wait six months to put your house on the market, those comps won't reflect any price shifts your market may have experienced.

Both real estate agents and appraisers will give you a good idea of just how much all those "custom" touches contribute to the value of the house (generally, a lot of "custom" features get ripped out by the new owner, because they are too personalized in color or function.)