MARKET ANALYSIS

Comparative Market Analysis

A Comparative Market Analysis (CMA) is a tool used by real estate agents to value a home. It evaluates similar homes that have recently sold in the same area. Agents find comparable sales and use them to conduct a sales comparison. 

APPRAISALS

Based on a Professional’s Opinion

An appraisal is an unbiased valuation of a home based on a professional’s opinion. Appraisals are typically required by mortgage companies for home purchases and refinances. In Summit County, the cost of an appraisal can exceed $500 and is generally paid by whomever orders the appraisal, whether the homeowner or the purchaser, as negotiated within the contract. The process includes a comprehensive visual inspection of the home’s interior and exterior. Appraisers also consider recent sales of comparable properties and current market trends. A detailed report is then compiled highlighting the property and any comparable sales, photos of the home and street, an explanation of how square footage was calculated, and other relevant information.

REFINANCING

Lenders determine the amount of their loans based on the appraised value of your property. Depending on the type of loan, they typically allow you to borrow between 75% and 96.5% of your home's value. This calculation helps lenders determine your equity in the property, which is the difference between its appraised value and any outstanding liens. Generally, the more equity you have, the better loan terms you may qualify for when refinancing though factors like credit score and debt-to-income ratio also play a significant role.

HOME IMPROVEMENTS

If you’re doing home improvement projects to increase the resale value, you want to make sure you’re not pricing it out of the market. If your home is already priced on the high-end for your neighborhood, making too many improvements could make it more difficult to sell. When you get a valuation, you can see how your home compares with others in the neighborhood and let this guide your home improvement decisions.

QUALIFYING FOR CREDIT

If you want to borrow cash against your home, getting a Home Equity Line of Credit (HELOC) could be a good option. To qualify, you must have a certain level of equity in your home. Most lenders require at least 20%. Getting a home valuation will help you determine if you qualify and will be used by the lender to make a decision on your loan.

PLANNING

Though it’s not a necessity, simply knowing the value of your home is good information to have. It will help you plan for the future and deal with unforeseen circumstances when you might be in a position that requires extra money or a quick relocation. Knowing how much equity you have in your home and how much you may be able to borrow against it or sell it for will help you respond to any financial curveballs that life throws at you.