What is the VALUE of your home and who determines it?
With facts and figures tossed around liberally (especially here in Miami!): Market Value, Appraised Value, Assessed Value, List Price, Sales Price, Replacement Value … understanding the value of your home is a tough nut to crack:
Market Value, as referred to in the tax role, references what the county believes the fair market value to be.
Appraised Value is set by an appraiser (comparing recent sales… normally going back no more than 3 months) … Appraised value is the benchmark used by a lender in determining the amount of mortgage the lender will finance.
Assessed Value is the amount determined primarily for tax or legal purposes. The county assesses or appraises your property to determine the taxable value. You can also have an independent appraisal done, to evaluate and assess your property for contingency tax disputes… to reduce property tax.
List Price is determined through market analysis of comparable properties in the vicinity (having sold within the past 3-6 months … currently “pending” sales… and currently-listed “similar” properties potentially competing for the same buyer-pool).
Sales Price is what the property actually sells for… determined by market conditions and what a specific buyer is willing to pay for that property.
Replacement Value is a ‘guesstimate’ as to what it might cost to replace or rebuild the house at some unknown point in the future. Replacement value is used for insurance coverage on a property, by estimating the cost to return a property to it’s pre-loss condition.
Replacement value has absolutely NOTHING to do with your purchase price, or the amount of your mortgage, or the assessed property value for tax purposes… It excludes the land value and landscaping from the equasion. In brief, replacement value is the estimated cost of replacing the house itself (the structure), due to a natural disaster… fire damage, hurricane, flood, or otherwise.
Factor in to your “replacement value”: Inflation, fluctuation in building costs and materials, labor costs, market conditions, which all affect replacement value. Upgrades and rennovations (new cabinetry, kitchens, baths, additions, shutters or awnings, hardwood floors, upgraded appliances, newly replaced windows or doors… or unique features your house has) should be considered … in determining eventual “replacement value”… Replacement value is what’s used in quoting insurance coverage. Have real estate questions? If you do, chances are others will as well. Alexandra and Vicki Restivo will answer them, and may even blog about them! Go ahead… ask! Your questions are welcomed… and when you’re ready to buy or sell … we’re ready to help!MiamiRealEstateCafe.com …. READY WHEN YOU ARE! Vicki Restivo 305-793-1365
