When you are ready to sell your home there are several things to consider and the most important is how much you are going to list your home for. One way to determine the value of your home is through an appraisal. An appraisal is an opinion of how much the value of an item is, whether it is an antique, an automobile or your house. A professional appraisal should cost somewhere in the $250 to $500 range depending on several variables. For this money, you will get a complete analysis of the estimated value of your home. An appraisal takes several factors into account including condition, proximity to services, and overall neighborhood values. All of this will be considered when determining the value of your home. Appraisal work is not an exact science; different appraisers could, and do, come up with different numbers. Even if all of them agreed on a value, there is no guarantee that you would receive that amount for your property. An appraisal, no matter how scientific, still ends up being the professional opinion of the appraiser, so the value they set is not set in stone. The appraiser must compare, for example, the condition of your house in relation to the comparable properties, which to some degree is a judgment call. If you are unhappy with the appraisal there are several inexpensive things you can do to improve your home’s value. Your Agent can help you determine how to improve your home’s value, one simple way is to improve your home’s curb appeal (see the article on Curb Appeal on this site).

There are three general approaches to determining the value: the cost (or replacement) approach, the comparison approach, and the income approach. (Unless your property is commercial or a rental property, the income approach will not apply). In the cost/replacement approach the appraiser will determine what the cost would be to replace or rebuild your home in today's market. This method is a little less accurate than other methods and is not the way the buyers’ appraisal works. In the comparison approach, the appraiser will determine what comparable or like properties have sold for in the last 6 months to a year. This approach directly compares your house to these other properties, adding to value for special items that your house has, or deducting value for items that your house lacks (in relation to the comparables). In all likelihood, this comparison approach will give you the most accurate estimation of the worth of your house. 

If you plan to use an Agent to sell your house you may want to forgo the appraisal process and let your agent perform a Comparable Market Analysis (CMA). This is very similar to the comparison approach that the appraisers use. The Agent has the ability to research the sales within the area for you quickly and easily. It will save you money and allow your home to go on the market faster than scheduling an appraisal. If you plan on selling your house on your own, and are not planning on using an agent, you should consider having a professional appraisal done on your home. Another option, if you have a lot of time on your hands and if Deed Recordings are publicly available and easily accessible in your locality, you can search for all properties sold in the last year that are similar to your house. However, it is important to remember that since you are not trained in this type of analysis, your numbers may not be as accurate and you may end up having to do an appraisal or hiring an agent in the end. In most cases your buyer will not be able to use the appraisal you get when selling your home, so having one done at this early stage may not be in your best interest. If you are working with an agent you should ask them if you should have one done before you spring for that service. Your agent has your best interests at heart and will be able to guide you on any expenses you will incur when selling your home.