3 Common Factors Considered When Finding the Real Value of a Property

Finding out the real value of a property is very difficult considering the number of bank REO sales and foreclosures that are out there.

The most common method used today is the comparable sales method and by far is the most accurate one too.

Even though there are a number of factors that come into play, here are the 3 most common ones used by this method:

#1: Location

This is probably the single most important factor when it comes to appraising a home. Simply put, you appraise sold properties all within the radius of one mile. If there is a subdivision, you need to look for home that were built in the same time period as well as are similarly built too. One thing to watch out for are dividing lines since these geographic lines might not offer comparable and accurate values.

#2: Square footage

The thumb of rule for most appraisers is comparing the home with others who are 20% less or more, in terms of square footage. In most cases, and particularly with subdivisions, the homes will be of the same square footage. That said, don’t think that a few extra hundred feet of space can get you a little more because it depends on other factors such as the value of the land, sewer, subdivision plans, cost of construction etc.

#3: Rooms

Simply put, the number of bedrooms and bathrooms matter much more than the raw footage of any home. In other words, a 1250 square feet home with three bedroom is more value than a two bedroom place with the same square footage. Location of these rooms and their quality matter greatly too.