As a home owner who is considering selling their house in Simpsonville, SC the biggest concern is, “What’s my home worth?” It takes an expert real estate agent to help determine that. You see there are a few moving parts in a real estate transaction. You have the BUYER, and the BANK/LENDER, of yeah and of course you the most important SELLER. The buyer and seller work from the perspective, Supply/Demand creates Value or Price.
As the market ebbs and flow; costs of construction, couple with appreciation, or improvements, and the depreciation of the US Dollar are all taken into account in the Supply and Demand structure of a home’s value or price it could sell for. As Supply decreases and Demand stays the same or increases the Value of the home goes up. However, the banks the company holding most of the risk in the deal want to ensure the asset (the home) they are loaning the money for isn’t “overvalued” or isn’t increasing in VALUE at a rate the Economy cannot sustain.
Right now the wealth in America has tripled in value since financial crisis of 2007, when the average American had $109,000 of Net worth based on a Federal Reserve Survey. The average Net Worth of an American in 2017 was $301,000 according to a survey from Credit Suisse. Thank you to our great leaders, both President Obama and President Trump who have continued to grow our nation and help make a better country. It seems clear we have a sustainable economy. Now we must tackle the bank or lender in the real estate transaction. Their desire is much different than the Buyer and Seller. They want to protect their investor’s money they are loaning.
Thus enters the Appraiser for the Lender of your mortgage. The appraiser’s job is; provide an objective analysis of the value of the asset/home in today’s market. You would think gosh, Supply and Demand have to play an important role. NOPE. Well then the $30,000 I spent updating my kitchen has to increase my house by $30,000 nope. All homes need kitchens right? Just because your house has improvement such as this the “value” that is placed on it from an appraiser could be as low as $10,000…YIKES. The appraiser is given very strict guidelines from the Lender. All these guidelines are in place to protect the Bank or Lender. In the end they end up adding protection to the real estate market growing out of control. This can be good and bad. It is not a free market but it is as close to a free market that America has.