Greg Boan | Associate Broker
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What is my property (or the property) worth?

Greg Boan, RCC, Associate Broker

Licensed Real Estate Broker, Coldwell Banker, LLC Waldorf Astoria Boca Raton Resort & Club Office

I've been asked this question a thousand times. Really, I have. The answer is taught in "Real Estate 101". Property evaluation is established based on what a buyer will pay for a like property in a similar location. An over simplification perhaps but it's not sellers, appraisers, banks, real estate brokers or the tax man that set property values, it is the buyer. That said, professional appraisers are called upon by lending institutions and consumers to evaluate real estate worth. This task would seem easy in a cookie cutter community environment where all units are identical but in the large scheme of things cookie cutter properties are not the dominant model. Generally, there are no two homes exactly alike or two locations precisely the same. Professional property appraisal is considered an *art, not a science and the only segment of the real estate profession considered as such. It is the appraiser's personal opinion of value based on many subjective nuances of value such as location, view, condition, finishes, interior square footage, number of rooms, age, level of upgrades, other attributes such as waterfront, club affiliations, floor height in the building, size of lot, amenities and on and on.

Many buyers and even some real estate agents are under the impression that "dollars per square foot" are the last word in property evaluation. This is a misnomer. While it is one of multiple relative factors it is not number one. It would be equivalent of stating "meat is (X) dollars per pound" as a blanket conclusion of the cost of meat. Obviously Prime grade filet mignon is priced differently than Choice grade ground chuck and the same holds true of real estate. Many other factors contribute to value besides square footage. Similarly, value estimates published on consumer websites such as Zillow®, Trulia® and others are not appraisals and can be misleading. These platforms are basically statistical software programs that extract data from public sources such as the Tax Appraiser's records and subscription sources like the Multiple Listing Service (MLS). These programs just sum and net data, compiling averages with nearby properties, like or otherwise and sometimes not so near properties.

Rarely would three different licensed appraisers come to the exact same appraisal conclusion of a property. In the end an appraisal provides a guideline or opinion of value but the ultimate price paid comes down to the value perceived of the buyer and what he or she will pay.

© Copyright, Greg Boan, Oct. 6, 2017

www.SeasideLuxHomes.com

 
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