Simply worded, it is a real estate agent’s opinion of market value of real estate as detailed by recent sales of similar properties. It is not a written real estate appraisal.
Homeowners should stay in touch with the real estate market and continually be aware of the current value of their home, if for no other reason than making sure their homeowner’s insurance reflects current market value. Insurance is necessary to protect the assets you own, and carrying the proper amount of fire insurance limits becomes very important.
Knowing the current market value of your home is most important when thinking of selling, especially if the proceeds of the sale are needed to purchase another home. When homeowners guess wrong, they begin to look at homes or purchase another home in the wrong price range or find that the amount of equity is much less than anticipated.
When planning to sell a home, obtaining a reliable and comprehensive “Market Analysis Report” is a very important consideration for homeowners. A Market Analysis Report should contain much more than sold properties. While sold properties are the most reliable indicators of value, they represent events of the past. Real estate values vary from one time frame to another. Just because a home sold for a certain price three or six months ago does not mean that a similar home will sell for the same price today. It could sell for more, if the real estate market is strong and values are rising, and it could sell for less, if the real estate market is weak and values are dropping.
It is the current real estate market which determines market values. A comprehensive analysis of market value should also include active listings, under contract sales and expired listings, those properties which did not sell during the marketing term. The analysis should include asking price history and days on market.
Real estate is local, whether the home is in Colonia or Iselin, New Jersey, in Middlesex County or in some other State. What is occuring in one section of the Country, State, County or Region may not be representative of what is occuring locally. Home sales and home values vary from one Town to another and from one Neighborhood to another.
When properly prepared and presented by a REALTOR for a Homeowner, a Market Analysis Report should provide a realistic and reliable estimate of the current value of their home.