how are comps detremined, and what detremines an apprasial?

Asked by Oj, Allegheny County, PA Wed Nov 2, 2011

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Erica Ramus,…, Agent, Pottsville, PA
Wed Nov 2, 2011
An appraisal is an unbiased estimate of what a buyer might expect to pay – or a seller receives – for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of their property.

It all starts with the inspection. An appraiser’s duty is to inspect the property being appraised to ascertain the true status of that property. He or she must actually see features, such as the number of bedrooms, bathrooms, the location, and so on, to ensure that they really exist and are in the condition a reasonable buyer would expect them to be. The inspection often includes a sketch of the property, ensuring the proper square footage and conveying the layout of the property. Most importantly, the appraiser looks for any obvious features – or defects – that would affect the value of the house.

Appraisers rely on the sales comparison approach to value these types of items. Appraisers get to know the neighborhoods in which they work. They understand the value of certain features to the residents of that area. They know the traffic patterns, the school zones, the busy throughways; and they use this information to determine which attributes of a property will make a difference in the value. Then, the appraiser researches recent sales in the vicinity and finds properties which are ”comparable” to the subject being appraised. The sales prices of these properties are used as a basis to begin the sales comparison approach.

Using knowledge of the value of certain items such as square footage, extra bathrooms, hardwood floors, fireplaces or view lots (just to name a few), the appraiser adjusts the comparable properties to more accurately portray the subject property. For example, if the comparable property has a fireplace and the subject does not, the appraiser may deduct the value of a fireplace from the sales price of the comparable home. If the subject property has an extra half-bathroom and the comparable does not, the appraiser might add a certain amount to the comparable property.
1 vote
Becky Price, Agent, Allison Park, PA
Wed Nov 2, 2011
Comps are comparable properties that have sold recently or that are for sale in your home's area. Realtors will pull data and give you a range of what similar homes have sold for recently or are going for now, to give you an idea of how to price your home, or how much to pay for one.

Only a certified appraiser can provide an appraisal.
1 vote
Luther Worma…, Agent, Monroeville, PA
Wed Nov 2, 2011
Hi OJ, I know it has already been stated below, but I just wanted to bring a different view on this. Comps (comparables) are determined by comparing the home in question to other homes with similar qualities. Both agents and appraisers use comparables when determining value, yet with different methods.

An appraisal is done, in PA, by a certified appraiser. They have a more unified method of determining value of real estate. The main focus is what is this property worth right now. Like Erica mentioned unbiased.

A CMA is done by a licensed Real Estate Agent/ Broker. The methods to determine market value vary between agents/ brokers. The main focus is how much a ready willing and able buyer will spend on the property. Very biased depending on who the CMA is done for (Buyer or Seller.)

Hope this helps
0 votes
Darla Jobkar, Agent, Pittsburgh, PA
Wed Nov 2, 2011
An official appraisal can only be completed by a Certified Appraiser in PA. The comps are determined by real estate activity in a specific vicinity relative to the subject property in order to determine the property's value. The appraiser reviews similar homes that are currently on the market, pending settlement or under contract and MOST IMPORTANTLY the SOLD PROPERTIES--the actual sale price, days on the market, condition and they determine if there were any seller concessions.
0 votes
Blair W. Coh…, Agent, Monroeville, PA
Wed Nov 2, 2011
Typically comps (comparable's) are similar properties, sold within the past 12 months within the subject properties area. The three common methods of determining value by appraisal are the comparable approach, the reproduction approach and the income approach of which the comparable approach is by far weighted the heaviest. An appraisal is a certified experts opinion of value.
0 votes
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