Appraised Value in Washington DC: The Ups & Downs Of How Much A House Is Worth
Determining fair market value for your Washington DC, Northern Virginia and Maryland property is an eternal struggle and major balancing act. That’s because buyers want a house to appraise on the low side to keep the purchase price down. While sellers want the same house to appraise on the high side to make the sale price higher.
So with all these different agendas and points of view, how is the fair market value of a real estate property actually determined?
Once a year, your county sends all area homeowners official notices that put a dollar value on their property. And property taxes are based on those dollar values. But before those notices get sent out, a long, detailed process usually takes place. First, the land is valued as if it’s vacant, empty lot. Then any improvements are described and measured. Improvements consist of the house and any other structures, pools, sheds, garages, and so forth. Next, most counties check the Marshall Valuation Service Cost Guide. It’s a standardized nationwide guide for determining the value of the cost per square foot to build a building that fits the description of the improved property. Next, if the house isn’t brand new, the replacement cost is considered, as well as depreciation; the year the house was constructed and the condition of the property are factors here. Appraisers then must take the critical step of comparing the value of the house with recent selling prices of similar homes in the neighborhood. At this point, the appraisal might be adjusted upward or downward.
Market Value is a theory…
In a perfect world, you have to have willing buyer and a willing seller. Neither is under duress. Both are in a position to maximize gain and are trying to do this. But in the real world, things are rarely that simple and equally balanced. Which is why people feel differently about the appraisal value of a house. It really depends how strong their position is as a buyer or seller.
Does the local economy come into it at all? You bet it does.
Ask a successful realtor about that! He or she will tell you they’ve noticed that the Los Angeles area is a fast-growing economy and attracting people from other areas who consider real estate here a bargain. That helps fuel increases in property values.
You’re armed with the information you need to make a better house-selling and buying decision. For instance, you can understand how two virtually identical houses that are in two different neighborhoods could be very far apart in price and appraised value.