Market Value
When an Appraisal is done, its ultimate goal is to define a Market Value for that property. So, in short, market value is the value of a real estate property in a free competitive market.
Many variables are considered by the Appraiser when analyzing the monetary worth of a property. Supply and demand are the essential factors, but there are others - like structural condition and aesthetic features - that also weigh into the appraiser’s analysis. Sometimes, when a comparative analysis is not enough to assert a price to the house, an Appraiser would use the Replacement Cost and the Income Approach to better evaluate them.
Market Values are not set in stone. Here are three things that can affect it:
- Location, location location. It’s a real estate cliche, right? Because it’s true. A house that is completely identical to another (build-wise) can get sold at a much higher price just because it’s in a premier location.
- Plastic Surgery. You can improve the effective age of your house (and its value) by doing renovations and adding valuable assets to your house. A sauna could not only provide you a good time during the winter, but also bring the market value of your home up.
- Chance. If a trendy retailer sets shop across the street from you, your house may have a spike on its market value. But it could go the other way around too, if - for example - there’s a spike in criminal activity within your area.
The truth is that a comprehensive appraisal keeps an eye on all available information in order to have a clear picture of the property’s value.
Real estate tips:
Find more terms in our real estate Glossary!
And use The OFFICIAL Real Estate Agent Directory® to find an agent for you!
Popular Real Estate Terms
Another residence in addition to the main residence where a person or family resides. An example is a second home out of the city used on weekends and during vacations. Interest and real ...
Money set aside for a possible loss, such as from a fire. ...
An estate constrained from some heirs and dedicated to others on the basis of a certain condition. ...
A reciprocal transfer of property from one entity to another. A market for securities of a real estate companies, such as the New York Stock Exchange (NYSE) ...
When dealing with foreclosure, anti-deficiency laws can act as a life raft for many homeowners. They are state laws that come as a form of relief protecting the purchaser of residential ...
Also called a teaser. The starting interest rate of an adjustable rate loan. It generally lasts between 1 and 12 months, at which time the loan rate increases based on prearranged criteria. ...
Rights allowing an insurer to act against a negligent third party to receive reimbursement for payments made to an insured. ...
In real estate, Attractive Nuisance is how insurance companies classify something that is inherently dangerous and particularly enticing to children. A hazard located within a property that ...
A municipal or county local government board that resolves zoning disputes. ...
Have a question or comment?
We're here to help.