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Calculating Phoenix Home Value

Calculate Phoenix Home ValueEstimating the value of a Phoenix home is a science more than it is an art. Factors like average days on market, availability of other competing homes for sale and seasonal demand fluctuations should all be taken into consideration – but more so when determining the pricing strategy for your home, not calculating its market value.

Phoenix home value is calculated using a fairly strict set of criteria, including using:
– similar size homes (generally not more than +/- 15% in square footage difference)
– similar age homes (generally not more than +/- 10 years difference)
– similar neighborhoods or subdivisions (appraisers typically will not cross a major road or highway to find comps)

Phoenix home value is impacted by differences in:
– quality of home construction
– quality of improvements made
– size of lot
– lot views and/or privacy
– number of garage parking spaces
– number of bathrooms
– having a pool and/or spa
– having a fireplace

Once an opinion of fair value has been reached, how do you determine pricing strategy?

Within each neighborhood there are typically 3 price ranges:
– high (homes that bring the most $/sqft)
– low (homes that bring the least $/sqft)
– mid (homes that fall between high and low)

Most value ranges vary by more than $10/sqft so it is important to select the appropriate price range for the home and then to correctly position the home within the appropriate range. Having your home well positioned within the correct range doubles your chances of getting the home sold. Keep in mind that selling a home is both a price war and a beauty contest.

As you have probably realized by now, figuring out a home’s realistic market value and proper pricing strategy goes way beyond finding out what a neighbor sold their house for and multiplying that $/SQFT ratio by the total SQFT of living space in your house. Submit your property details if you would like me to provide you with a no cost, no obligation, value estimate for your Phoenix home.

Understanding Appraisal & Calculating Living Space

phoenix home appraisal

Appraisals are an essential part of the loan process. They serve to establish an independent opinion of value the buyer’s lender will use in approving the loan during underwriting. Keep in mind, the appraiser is randomly assigned by the lender to perform the appraisal so is impartial to all parties.

The value of a property is impacted by condition and it is important to understand what many adjustments are made to reconcile value: living area square footage, lot size, age of property, quality of construction, pool and/or spa, garage spaces, renovations and/or improvements, lot view and/or privacy, fireplace, yard hardscape, etc.

Despite all the factors that affect home values, differences in square footage account for 2/3rd of the variation in sales prices of single-family residences. Living area is the total area of finished above grade residential space. This is calculated by measuring the outside perimeter of the structure and includes only finished, livable above grade space.

How does an appraiser determine square footage?

  • Unfinished areas above grade are not included
  • Openings to floor below are not included
  • Finished areas connected by hallways and staircases are included, if above grade
  • Finished areas not connected are not included
  • Garages, chimneys, bay windows and other areas that extend beyond exterior finish without flooring are not included
  • Finished areas must have ceiling height of 7′ (except under beams and ducts where height may be 6’4″)

What is considered finished living area?

  • Wall and ceiling finishes include painted drywall, wallpaper covered drywall and wood paneling
  • Floor finish includes carpeting, vinyl sheeting, tile, hardwood flooring and does not include bare or painted concrete
  • Exterior finish include masonry or masonry veneer, wood, aluminum or vinyl siding

The room count and gross living area should be similar for the subject property and all comparables. For example, a four bedroom comparable sale generally is not acceptable to support value of a two bedroom subject property. The appraiser must address large differences between the subject property and the comparable sales, since they raise doubts about the validity of the comparables as good indicators of value.

Adjustments for differences in the number of bathrooms are made before adjusting for square footage differences. Any adjustments should be based on market reaction, rather than on cost. For example, in some neighborhoods, buyers may consider two bathrooms typical and the value of a third bathroom may be very small in relation to its cost. However, in other neighborhoods, buyers may expect three bathrooms and a house without a third bathroom may be penalized in the market even more than the cost of an additional bathroom.

The appraiser must be consistent when they calculate finished above grade room count and square footage of gross living area above grade. For detached homes, the appraiser should use the exterior building dimensions per floor to calculate a property’s above grade gross living area. For condos and attached homes, the appraiser should use interior perimeter unit dimensions to calculate gross living area.

Only finished above grade areas should be used – garages and basements should not be included. A level is below grade if any portion of it is below grade regardless of the quality of finish. Thus a walkout basement with finished rooms would not be included in the above grade room count. Rooms that are not included in the above grade room count may add substantially to the value of a property, particularly when the quality of the finish is high. For that reason, the appraiser should report the basement or other partially below grade areas separately and make appropriate adjustments for them in the sales comparison analysis.

Phoenix Property Value

phoenix-property-value-reportThe media is reporting a big rebound in home prices, especially here in Phoenix where we have enjoyed a bounce of more than 50% from our lows in mid-2011. As a Realtor, everywhere I go people now ask me “So how is the market?” – to which I respond: “It depends if you are buying, selling or investing”. It turns out that most who ask this of me are homeowners curious about the current value of their home, so let’s focus on Phoenix property values from a potential seller’s perspective.

To streamline the process, I have created a special site for you to obtain a comprehensive market evaluation report. This FREE report is manually prepared within 24 hours of each request and contains a wealth of relevant data about your own property, recent comparable sales activity nearby, your neighborhood demographics and of course a current price estimate for your Phoenix home, along with a range of property value and confidence indicator.

With home prices way up in recent years, are you curious to know more about your Phoenix property value? Are you ready to get your personalized FREE 20-page color report loaded with important details you need to analyze your home’s potential current market value? You may have equity in your home again!

Why spend up to $450 for a property appraisal? There is no cost or obligation when using this valuable service, so act now to get your customized Phoenix property value report emailed to you within 24 hours. You will also receive a special bonus report from Andrew Robb with your personalized home value estimate, entitled “How To Sell Your Home Fast For Top Dollar”.

Free home value estimate

Andrew Robb - RE/MAX Fine Properties, 21020 N Pima Rd, Scottsdale AZ 85255