When a home is appraised, the appraiser sizes up the property’s features and, based on similar houses that have recently sold in the area, determines the current value of that particular property. Because they are professionals who are evaluating properties every day, appraisers are among the first to recognize price fluctuations in the local real-estate market. This may account for the gap commonly found between a home’s appraised value and the current homeowner’s expectation of what their home is worth. Naturally a homeowner who is looking to sell or refinance their home will hope their appraisal comes in as high as possible and, because of this, homeowners will often overestimate the value of their property. In fact, according to a recently released survey, homeowners overestimate their homes’ value by an average of 2 percent. It isn’t always bad news, however. According to the survey, homeowners in some cities actually underestimate the value of their home. Denver, San Francisco, Dallas, Portland, Boston, Los Angeles, Miami, and Las Vegas were among the cities where appraised values exceeded homeowner expectations. More here.
