Sally English Atlanta Real Estate: How Much Is Your Atlanta Home Really Worth? Part Two

How Much Is Your Atlanta Home Really Worth? Part Two

In How Much Is Your Atlanta Home Really Worth? Part One

we looked at common misconceptions about predicting the market value of your Atlanta Georgia home.  Now we take a closer look at Appraisals.

From Part one we established that sellers often completely ignore the fact that the appraisal was done for a specific reason at a specific time and reflects the value of a home a specific point in time.    Our conclusion: 

appraisals reflect the purpose for which they were initiated

BANK APPRAISALS

If you have an appraisal from a lender, you have not been given the market price of your home; you have been given the upper limit of the lender's willingness to loan you money.  In particular, lenders have been overly generous in valuing homes for the purpose of making equity lines of credit. 

These appraisals are not measures of what the market says a buyer is willing to pay for your home.  They instead reflect the risk a lender is willing to consider when underwriting your loan. 

Current Market Value Appraisal by a Professional Appraiser 

If you instruct a qualified appraiser to predict the price your home will sell for in the next sixty days, you will obtain a pretty good estimate of what your home will yield on the market.  But, if you have an outdated (older than 30 days), second party appraisal (i.e. bank, estate, tax, insurance) used for an entirely different purpose; you do not have an accurate prediction for the market value of your home. 

Insurance Appraisal

Insurance values can be misleading indicators of a home's true market worth.  Insurance companies have a vested interest in making sure you can replace your home in the event of a fire or other disaster. 

The recommended insurance value of your home almost always exceeds the market valuation of your home.  The Antiques Road Show on PBS cracks me up when they give owners of antiques two different values for their family heirloom.  In reality, they are building in anticipated future appreciation when they assign a higher value for "insurance purposes" than for the antique "at auction."

Tax Assessors Appraisal 

The tax office is also a poor source for the market value of your home.  Despite an admirable effort to individualize the appraisal of your home for tax purposes, tax appraisers are looking at a huge database and have a limited amount of time when they assign a valuation to your home. 

In my experience, tax valuations in metro Atlanta counties have - for the most part - been below the actual market value of the home.  This is not 100% true, as I often receive requests from homeowners challenging an inflated valuation of their home by the tax office.  In the present market with rampant foreclosures the exceptions have become almost a "norm".

How Much is Your Atlanta Home Really Worth?

Now that we have put aside some misconceptions about appraisals we can start determining how much your Atlanta Georgia home is really worth.  In our next post

How Much Is Your Atlanta Home Really Worth? Part Three

we will get down to the nitty gritty of actually predicting the market value of your home. 

SALLY ENGLISH AND THE ENGLISH TEAM

Sally English and The English Team specialize in homes and neighborhoods convenient to Emory University and The Centers For Disease Control.  We often answer the question of how much is your home really worth with Free Market Analysis of Your Homeas part of our commitment to service excellence.  Our Comparative Market Analysis, CMA for short, will help you price your home for sale in the Atlanta Georgia housing market.  Call us at 770-939-3174,