Dallas Home Appraisals News and Information

Yesterday we had the opportunity to speak with a great group of Keller Williams realtors in Plano about residential appraisals.  One interesting topic that came up was the difference between "market value" and "appraised value", which can pretty much be summed up like this:  market value is the amount that a buyer is willing to pay for your house based on all sorts of factors both tangible and intangible, while appraised value is what a licensed professional and the bank think that your house is worth based on very tangible factors. 

While a certain buyer might fall in love with your house and be willing to pay top dollar, the bank views the value of your house relative to what similar houses in your neighborhood have sold for in the last 90-180 days.  To an appraiser, and to the bank, there is not much difference between a 3 and 4 bedroom home; and though a pool will add some value in the appraisal, that value is unlikely to be very close to the actual cost of building that pool. 

Many times a buyer is making an emotional decision, while the bank is interested in historical data. The bank knows that the actions of a specific buyer don't always represent the actions of a typical purchaser.  A buyer may fall in love with a house on a cul-de-sac that is a perfect place for his or her children to play, and not mind that there are power lines backing the house.  This buyer might be willing to pay more for the house than another buyer who does not care about a cul-de-sac and for whom the power lines may be a deal-breaker.  This is essentially why market value in many cases does not equal appraised value.

Make sure that before, or during the bidding process you have done your own research and you know what home appraisals in the area have gone for in the past.  This is where the services of a professional real estate agent and/or a licensed appraiser can be invaluable.