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ASK the Loan Man Hans Bruhner - February 2015 - What is my house worth?


ASK the Loan Man Hans Bruhner - February 2015 - What is my house worth?

by Hans Bruhner

Appraised value, assessed value, BPO or CMA……. How do I figure out what my house is worth? Remember that any opinion of value is for a snapshot in time and that is all. It is no good a few months from the date it is written.

A full appraisal by a licensed appraiser is what we use in the mortgage industry. Appraisers compare homes that have recently sold that are similar in size and utility and also physically close to the subject home and that have sold recently (within 90 days is best). The appraiser will give you an exact number for a value and it is an expert’s opinion of value. An appraisal is limited in what it can do and an appraisal on a purchase is better than a refinance because we already have an accepted offer on the property when we order the appraisal so they have something to shoot for that has been agreed upon by a buyer and seller. 

The tax assessor’s value may be close right after you bought it but it is not something to look at in California after a few years have gone by. Under proposition 13, the assessor is only allowed to move the assessed value up by more than 2% per year. So if you bought your house for $100,000 20 years ago it would be assessed for less than $150,000 today and it would definitely be worth a whole lot more than that so assessed value after a while means nothing.

A BPO is a Broker Price Opinion and these can be extremely accurate because it is a real estate agent report on the value of the home. Sometimes they go inside the home and drive by the comparable homes (comps) and other times they just drive by. It is typically ordered by a bank that has foreclosed on a house and wants a quick and cheap opinion of value and you get what you pay for.

A CMA on the other hand is usually done with great care by a real estate agent who specializes in homes in your neighborhood and is extremely knowledgeable about the comps they are using because they have seen them when touring and keeping abreast of the market. Yes, I am saying that a CMA is like a BPO but by a neighborhood specialist who has not only seen the subject property but seen the majority of the homes that have sold and the majority of the homes that are currently for sale as well. A CMA will take into account market trends as well as what has recently sold and sometimes more importantly, what did not sell. It is because of this that in my humble opinion, a CMA put together by a true neighborhood specialist is the absolute best way to tell you what the value of your house is worth.

So, stay in touch with your Realtors and they can help you along the path of homeownership and not simply when you buy or sell. A good Realtor will be happy to help you with information in between buying and selling. A good Realtor knows like I do that if you take care of your clients through their life, they will work with you when your services are needed and they will refer you to friends and family as well. It is great to have those long term relationships with clients.

If you need the recommendation of a good Realtor or any other service professional, please feel free to Ask The Loan Man. 

Need to know more? Please send me your real estate and mortgage related questions. I am happy to answer you and it may become the topic of a future article.

Hans Bruhner (NMLS 243484) is a branch director for First Priority Financial, Inc (NMLS 3257). Both are licensed by the Department of Business Oversight under the CRMLA.  If you have a question, please contact Hans at (707) 887-1275 or