Once you have found a home that you are interested in purchasing, the next question to ask is, "How much is it really worth?" You want to know whether the seller is asking too much or if the home is priced at fair market value.
One way to determine how much a home is worth is to have it appraised by a professional appraiser. A professional appraiser will look at the physical aspects of the property (age, structural soundness, landscaping, etc) and its location (condition of surrounding houses, access to transportation, nearby commercial development, etc.) to help determine what the property is worth. Lenders will use the appraiser’s report to determine how much they are willing to loan the buyer to purchase the home.
In addition to obtaining an appraisal, you may want to consider obtaining a Comparable Market Analysis (CMA). A CMA is a comparison of the recent sales of similar properties in the same area or neighborhood from the previous six or twelve months. Sellers’ often obtain a CMA from their real estate agent and use it to help them ascertain a selling price for their home. Having this kind of information in your hands can help you to determine whether or not the home is accurately priced and will assist you in negotiations with the seller.
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