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Real Estate Information |
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Real Estate Appraisal - Do It Yourself
For single family homes, there are two basic methods used in real estate appraisal. They are replacement cost analysis, and using comparable sales. A third appraisal method, based on capitalization, is used for income properties, and is covered in another article. In figuring replacement cost the question is: What would it cost to buy this land and put this house on it? If the land (improved) would cost $40,000, and the house could be built for $150,000, the value indicated would be around $190,000 - if the house is fairly new. If it has used up 10% of its useful life, you can deduct $15,000 for depreciation. Replacement cost is not really a very useful measurement. It is difficult to say what the land is worth in a city center where none is left for sale, for example, and tough to gauge depreciation. It is used as a secondary method, and for unique homes that can't be compared easily with others. The primary method of real estate appraisal used for homes is a market analysis using comparable sales. Real Estate Appraisal 101 To get a good idea of what a home should sell for, you need to compare it to homes that have sold. Find at least three similar homes in the same area that have sold within the last year, preferably within the last six months. This information is available in the county records, or from a real estate agent with access to the MLS (multiple listing service). Now the confusing part. You start with the selling price of each of your comparables. If your subject home has a second bathroom, and the a comparable doesn't, you add the value of the bathroom to the sales price of the comparable. If a comparable home has a blacktop driveway, and the subject home doesn't, you take the value away. You are rectifying differences, to see what comparable homes would have sold for if they were like yours. So if a comparable sold for $140,000, and a bathroom is worth $15,000 in your area (ask a real estate agent for help with these figures), you ADD $15,000 for the bathroom it doesn't have. Then you subtract, say $4,000, for the paved driveway it does have. This gives you a comparable sales price of $151,000. You do this with all differences between the subject home and each comparable. When done, you average the three comparable prices. So if the three comparables have adjusted sales prices of $151,000, 162,000, and 149,000, you add the three figures and divide by three. The indicated value of the home is $154,000. Of course all appraisal is an inexact science. If you can only find comparables sold over a year ago, you have to estimate appreciation in the area. If one sold with seller financing, you have to decide how this affected the price. For all of it's flaws, however, for single family homes, this is the most accurate method of real estate appraisal. Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
MORE RESOURCES: Cambridge is the worst city in New England for first-time homebuyers, study says. Where’s the best? The Boston Globe Blackstone's Wesley LePatner, a mentor to women and real estate investing leader, killed in NYC office shooting Business Insider The real estate market: 5 key themes to watch this week Real Estate News by RealEstateNews.com AI Is Transforming Real Estate Marketing | Florida Realtors 18 months later, Blackstone still sees real estate comeback ahead Private Equity Real Estate | PERE Real estate: Condo prices rise in Indian River County; fall in Martin, St. Lucie counties Treasure Coast News Troy Furbay has been appointed Managing Director, Hospitality at Crescent Real Estate LLC Hospitality Net ‘Walking beside him’: Daughter continues stepfather’s real estate dream Mountain Home Observer Richland County property transfers recorded July 21-24 Mansfield News Journal Double digit price increases for Putnam real estate Mid Hudson News I-78/I-81 Corridor commercial real estate activity picking up Lehigh Valley Business Alex MacWilliam of Alex MacWilliam Real Estate in Vero GlobeNewswire Haag-Brown Commercial Real Estate to open Bentonville office Talk Business & Politics RE/MAX revenue continues to slip despite agent gains Real Estate News by RealEstateNews.com US industrial real estate investor Terreno sells $82m portfolio IPE Real Assets Executive Killed in Manhattan Shooting Was CEO of Blackstone's $53 Billion Real Estate Megafund Realtor.com Inside Zillow’s summer launch: 5 new tools built for agents - Real Estate News by RealEstateNews.com Inside Zillow’s summer launch: 5 new tools built for agents Real Estate News by RealEstateNews.com Real estate transfers: 7/30 Toledo Blade Anywhere revenue inches up despite ‘weird’ housing market Real Estate News by RealEstateNews.com Real Estate Expert Jody Wainio of Buyers Choice Realty Shares Advice on Mortgage Pre-Approvals in HelloNation GlobeNewswire Real Estate Transactions | July 14-18, 2025 Republic-Times Leading Arizona Real Estate Team JBRE Joins Real Brokerage, Bringing $310M Sales Portfolio Stock Titan Real estate office renovating former daycare The News-Enterprise Exclusive: Apple to buy another Silicon Valley campus for $365 million San Francisco Chronicle News | UK commercial real estate investment slips slightly to £10 billion in second quarter - CoStar Ledge Road property in Newport sold for $3.3 million tops latest Newport County sales Newport Daily News Christie’s Debuts Crypto Real Estate Division The New York Times What’s Rising Across the Upstate? Updates on 7 Real Estate Developments Upstate Business Journal Santa Monica Ranks Second Most Expensive for Rentals as Real Estate Market Shows Mixed Signals Santa Monica Daily Press Atlanta real estate tycoon Tom Cousins has died at 93 Rough Draft Atlanta Chris Heller’s real estate team joins eXp Realty HousingWire Easton home on Sierra Drive that sold for over $1M 'epitomizes one-of-a-kind luxury' Enterprise News Hamptons Real Estate Market Data – Week of 7/22/2025 Hamptons.com Population Growth in England and Wales: A Boon for Real Estate and Social Infrastructure Sectors AInvest With The Enolia, MCB Real Estate reinvents the residence hall for Morgan State University Baltimore Fishbowl Blackstone’s LePatner killed in NYC shooting Private Equity Real Estate | PERE Boardwalk Real Estate: Q2 Earnings Snapshot San Antonio Express-News RealPage buys Rexera, maker of 'AI agents' for real estate deals The Business Journals Apollo Commercial Real Estate Finance, Inc. Reports Second Quarter 2025 Financial Results Quiver Quantitative One of the world’s largest luxury real estate firms wants to help you buy a house — with crypto New York Post Lucky Strike Entertainment Buys Up Location Real Estate RePlay Magazine Gold Key Real Estate lewistownsentinel.com Commercial Real Estate Still Has a Software Problem Commercial Observer Judge sides with LGBTQ+ Alliance in battle with ex-CEO Real Estate News by RealEstateNews.com Brixmor Property Group's Q2 2025 Earnings: A Strategic Playbook for Resilient Retail Real Estate AInvest Fed Interest Rate Predictions: No Cut Expected Tomorrow, July 30, 2025 Norada Real Estate Investments The Future of AI in Real Estate Valuations: Understanding Tomorrow’s Appraisal Standards Appraisal Buzz WeWork Wants You to Know It’s a Grown-Up Real-Estate Firm Now The Wall Street Journal NexPoint REIT Offers Shareholders Choice in $0.15 Distribution: Cash or Stock Payment Options Stock Titan Real estate: Home prices climb in Martin, Indian River counties; fall in St. Lucie County Treasure Coast News Partners Real Estate names a new top executive in Austin The Business Journals |
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