Appraising a condo, especially if the condo is an apartment, may not be as difficult as appraising a more unique property. This is because there are usually plenty of “comps” or comparable properties that have recently sold. While it is possible to get an idea of what the condo is worth by examining similar properties and their sale prices, for a more accurate appraisal the owner or prospective buyer can hire a professional appraiser. Whether you ask a real estate agent, hire an appraiser or do it yourself, there are several things to take into consideration when appraising the value of a condo.
Examine the location of the property. If it is waterfront property, located in a desirable city or in a popular resort town, the value may be higher than for a similar property in a rural location. Proximity to transportation, highly rated schools, shopping and recreation can also contribute to the price of a home.
Find out the square footage of the property. Real estate agents sometimes use square footage as a rule of thumb for appraising a property. To use this method, multiply the square footage of your condo by the average price per square foot of homes that recently sold in area. When using comps, add to the value if your home is larger, and subtract if it is smaller.
Look at the layout of the condo, especially the number of bedrooms and bathrooms. For some people, a contemporary open layout with a “great room” is a plus that can add value to the home, especially if the condo is being marketed to the younger generation of buyers. Private baths in the master bedroom and areas to accommodate a dining room table can also be a plus.
Make a list of special amenities that add to the value of the condo. An assigned parking space, storage areas, central air-conditioning and energy-efficient appliances are all desirable. Upgrades like hardwood flooring, granite countertops and fireplaces can also add to the appraised value. Take note of recent repairs made to the home, like a replaced water heater or renovated kitchens and baths.
Conduct research about recent condo sales in your building. Make sure you are looking at the sale price, not the asking price, and take note of how long it took to sell the unit. If the condo sold in a reasonable amount of time, it was probably priced well. Then see how your condo compares, add or subtract from the sale price, and come up with a “guestimate” of how much your home should sell for. Then, you may want to take the next step and hire a professional appraiser, especially if home sale prices vary widely.
Tips & Warnings
- When using "comps," or comparable properties, make sure you are looking at the price similar condos in the building sold for, not at the asking price. The asking price does not determine market value.
- Photo Credit Jupiterimages/Creatas/Getty Images
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