Types of Valuation Evidence
A recent sale is the best evidence of a property’s value. The property must have been exposed to the open market such as a listing with a realtor and there must not be any duress influencing the sale such as foreclosure. Type of evidence our office requires is; the MLS listing sheet which can be obtained from your realtor; the closing statement also known as the RESPA statement or HUD statement; an appraisal used to support the purchase price; an inspection report detailing the condition of the property which may affect the purchase price .
Recent or Current Listing
A recent or current listing of the property generally establishes the upper limit of value. The property must be exposed to the open market such as a listing with a realtor for a period of time. Again, the MLS listing would document the asking price and market exposure.
An appraisal can offer an opinion of value. While an appraisal is a great source of a property’s value, they can cost $300. My office is attempting to provide sources of free evidence to the public and those sources should be utilized before anyone should pay for an appraisal.
A few key issues when ordering an appraisal;
- the appraisal valuation date should be January 1st, of the current year which equals the assessment date;
- the purpose of the appraisal should for real estate assessment review;
- sales comparables selected should be sold near the assessment date not exceeding 6 months after;
- sale comparables should be within close proximity to the subject;
- sale comparables should be the same style of construction as the subject (1 story to 1 story comparisons).
If you have a recent appraisal for refinancing we can review those appraisals also. However sometimes there are issues with refinance appraisals making them more difficult to evaluate. We review all appraisals provided to our office to ensure the best comparables are used and appropriate adjustments are made.
Find Comparables using the Lake County Website
The Lake County website is one of the best sources to find comparable properties for both sales and equity arguments. Also the website provides a comparison grid of your property to other like properties. There are detailed instructions found on this website to assist in its usage. It is important to remember the comparable list generated by the Lake County site is a suggested list of comparables. It is the task of the homeowner to determine the best comparables most similar to the subject property.
Market Analysis from a Realtor
Realtors can provide homeowners with a “Market Analysis” that depicts a property’s value. While my office will look at any evidence of value, the value conclusion in the market analysis is not given much weight. In many cases a realtor finds all the sales and listings in a given area without consideration to the factors influencing value. In most cases a large range, an average, or median of the sale prices is given as a value estimate. While realtors are experienced and knowledgeable about the real estate market most are not certified appraisers.
Policy for CMAs
Zillow.com and other on-line valuation sources
There are several on-line sources to assist owners estimate the value. It must be stressed these are estimates without supporting documentation. Again my office places very little weight on these sources