Many homeowners think an appraisal and a market analysis are the same but there are important differences between them. Although each is a valuation of a home, the difference lies in how that value is determined based upon the information one is looking for.

The Home Appraisal

An appraisal in most cases is done for the benefit of a lender or bank. When you're buying a home or refinancing, the appraisal is for the lender  - not you. It's done to ensure the home value justifies the loan amount requested.  Oftentimes homeowners hire appraisers just to find out how much their property is worth.  Thinking about costly home improvements?  An appraiser can analyze the feasibility of your plans to determine if they are the best use for the property.  Perhaps you want eliminate private mortgage insurance  - a current appraisal can also help with that also. 

An appraisal is calculated by concentrating on home sales within the previous six months and within a half-mile radius of your home. Does the appraised value mean that is what your home would sell for? Not necessarily. An appraisal can be higher or lower than the current real estate market value. That's where the market analysis comes in.

Understanding the real estate market

The real estate market is an ever-changing, dynamic force based on economic factors such as supply and demand, changing fashions and tastes, the season, interest rates, and any other socio-economic variable that can affect a community. What a house sold for next door six months ago may not be what yours will sell for today.

The market analysis is an in-depth report that takes into account not only what has sold in your area that is comparable with your home, it also accounts for what buyers are paying right now for properties like yours. This provides the most accurate indication of what your home should sell for. And when your home is priced right for the current market, it will sell quicker and for the right amount of money.