Last month’s U.S. News article headline looked promising: “The Guide to Understanding Your Home Value.” What St. Cloud homeowner isn’t at least curious about that? Written by U.S. News’s real estate editor, the piece addressed a slew of informational tidbits, some of which are not as commonsensical as you’d think.

Chief among them was a description of “the process of calculating” your home’s appraised value and how that relates to its market value. The relationship between the two—and the reasons they are different—is illuminating. A couple of the tidbits:

·         FALSE: “…your property value is based on what a buyer is willing to pay for it…” This sounds like it should be true, but it’s not. Unless the buyer is able to buy it singlehandedly, the truth is, the bottom line (literally) for its value is based on the financial backing the property can attract. If a lender can’t be found to foot the bill, a buyer’s estimate of its value is beside the point (despite the heartening vote of confidence, that isn’t a real buyer).

·         USUALLY TRUE, but…: “Hiring an appraiser can help you get a realistic estimate.”  In most circumstances, an appraiser’s professional estimate not only helps—it’s required. But the author undercuts the “realistic” by citing the high demand and low supply currently present in many U.S. markets, where “multiple offers are expected, and homes often sell well above asking price.” Those situations “make it easier to prove to an appraiser” that the market value is higher than the “exact value based on a large number of factors” of the formal appraisal (the Chicago Tribune’s definition). After all, that means that a realistic estimate was what the market indicates rather than what the appraisal calculated.

Knowing your St. Cloud home’s value is more than a matter of idle curiosity for area homeowners who are determining whether to put their property up for sale. Drilling down to estimate its value on today’s swiftly changing market is a balancing act combining comparable recent neighborhood sales, the facets of the property that are uniquely its own, and the temperament of the buyers we speak with daily. Call me for a readout for your own St. Cloud home—I’ll be pleased to compile a written report for you (of course, without obligation)!

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