Your single most important investment is owning your own home. It brings shelter and stability to your life, and over the years (oftentimes sooner), it becomes a source of security. What you might have bought a few years ago, you may not now be able to afford due to it¹s growth in value.

The single largest determinant in your net worth is the equity in your home. If you are a home owner, congratulations! You have an investment in real estate.

VALUE: There are many types of value that can be assigned to real estate: loan value, insurable value, mortgage loan value, salvage value, rental value, assessed value or fair market value. It is with fair market value that we will be concerned and this may be defined as the price which a ready, willing, able and informed buyer will pay (assuming the property is exposed on the market for a reasonable time). It is important to know that value is not necessarily the same as cost or price.

Value is an estimate of future benefit, while cost represents past expenditure. For example, given two identical homes, one located close to an industrial plant and the other in a desireable residential area, each would equire the same cost to reproduce but would have diferent market values. Price represents only the amount paid for the property, but due to an overanxious seller or uninformed buyer may be higher or lower than market value.

APPRAISAL: Homes are valued in relation to their own market. Many factors contribute to making one market more desireable than another, e.g., quality of schools, transportation, recreational & amusement facilities, cultural & religious institutions, city services, architectural tastes, local constructions costs. It can therefore be said that much of what constitutes the value of a home is of an external nature.

A run-down home in a highly desireable residential market may be worth more than its well-maintained counterpart in a market considered undesireable. There are three methods used to appraise real estate: the cost appraoch, the sales comparison approach and the income approach.

With existing single-family residences, the sales comparison approach is employed. This method gives an indication of value by comparing he property with recent sales and offerings of similar properties within your market.

PRICING: Your home will sell if priced corectly, especially in the So. Bay: Manhattan Beach, Hermosa Beach, Redondo Beach or Wl Segundo. Buyers are just pickier now than they were earlier in '04.