Do you know what your home worth? Well our definition of worth is different from what lenders think worth is. I use to say a home is only worth what a person would pay for it. Now I only look at the value of a home as what properties around it have sold for and that includes Foreclosed and Short Sale Homes. In the last year appraisers have started including properties that are foreclosures and short sales in as comparable values in the appraisal report. Foreclosures and Short Sales were the exception in the past but now they have become so common that they are driving down the values of home all around them. Since an appraisal is a report of what a property could sell for or what some one would buy the property for we have to see the effect of all properties that are being sold in the area. If you were selling a home that was identical to a home a bank was selling for 20,000 less your home, your home over priced.
Many people think just because a home was a foreclosure it should not be counted in the values of home that are being sold naturally. The fact, and a sad fact is why would a buyer spend more on your home when they can buy an identical home for less from a bank. Buyers are looking for the most value today. Not all foreclosed homes are run down and beat up.
If you’re not selling your home in the next 2-3 years I would not look at your home as an investment. Too often we looked at homes an investments tool and not what it really is. For most homeowners a home is just that, a HOME. A place to live and raise a family. I am not saying a home can not be an investment but I sleep much easier when I look at my home as a good sound place to live and not like my 401k, or lack of 401k.
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