Lynn's Real Estate Report

AVENTURA REAL ESTATE - WHAT IS YOUR HOME WORTH?

While there are many ways to evaluate a home, the two most common approaches are the CMA (Comparative Market Analysis) and the Appraisal. Most agents will provide a CMA for prospective sellers and buyer at no charge. An Appraisal is usually done by a licensed professional and carries more weight than a CMA when it comes to getting a loan but a CMA provided by an experienced Realtor will often tell homeowners all they need to know in order to price their home effectively. 

WHAT THE CMA TELLS YOU

A comparative market analysis (CMA) tells you what similar homes in your area have sold for in the past few months. If your home is located in a tract or condominium that has many similar homes, a CMA is more likely to serve as a guideline than if your home is a custom home located among other custom homes. 
The fact is, in the South Florida real estate market or in any real estate market, homes are not identical. Even if I could find two almost identical homes in terms of condition and features, the homes may have a very different environment or location. A home near the center of a development will be worth more than an identical home on the edge that may back up to a busy street. Or, one home may be blessed with lovely neighbors that all keep their homes in ship shape condition inside and out while the other home may have neighbors that do not take such good care. These conditions will affect the price.

LENDERS REQUIRE AN APPRAISAL

If the prospective buyer for your home needs financing in order to make the purchase, the lending institution is going to insist on a professional appraisal. Lenders will base their loan amount on whichever is lower, the sales price or the appraised value. Sometimes buyers are willing to pay more than the home is worth but lenders will still base their loan amount on the appraised value. The buyer will have to come up with additional cash to pay the difference.

WHY SOME HOMES ARE OVERPRICED

Sometimes sellers base the price they want for their home on emotional factors. It is not uncommon for a seller to over-value home improvements. For example, many people not only expect to get back every cent they paid to install a swimming pool, they even expect to make a profit on it. Then there are times when homes are scarce while the demand for homes in high. This is known as a Sellers Market and during times such as these home prices tend to get pushed up. There was a time in the South Florida real estate market when prices were on an upward spiral. 

WHEN HOMES ARE UNDER PRICED

Since 2008, South Florida real estate prices have been declining or stagnating due to poor economic conditions nationally. This is an excellent time to buy. In fact, these kinds of conditions create what is known as a Buyer's Market.