A large portion of A Quality Appraisal’s business involves appraisals of property prior to listing for sale. I am not trying to be a salesman when I say, “This is money well spent.” Your home is likely your largest investment. Typically, homeowners are willing to pay 5% to 6% of the home’s value to have a real estate agent market the property. Employing a real estate agent a good idea, but on a $300,000 home, the cost of your agent is $15,000 or more. The typical cost of an appraisal is around $500.
You might well ask yourself, “Why pay for an appraisal when the agent will give a value opinion included in the broker fees?” My answers follow:
1. Real estate appraisers are required to follow a detailed appraisal process for development of a value. The process requires supporting evidence for everything. On the other hand, a real estate agent can tell you what you want to hear, or what they want you to think.
2. Real estate appraisers have licensing requirements upholding no bias in the outcome of the appraisal or interest in your sale. A real estate agent could want your home to sell quickly so that they can collect their commission and move on to the next sale. A real estate agent might want to show that they think your home is worth more than the other agent so that you will choose them.
3. Real estate appraisers verify information. County records, for one reason or another, commonly show erroneous square footage for your property. If an appraiser finds your home to be larger than county records indicate, you can advertise the correct area and cite the appraiser’s sketch as evidence.
The agent who advertised this house was off by 146 sf. This is a small amount on a house that is more than 6,000 sf, but with linear regression statistics showing that each additional square foot is selling for $260, that could equate to a nearly $38,000 difference in the marketability. As a seller, I would want to market the correct living area.
4. The appraiser’s sketch can make a listing packet look more professional.
5. Two expert opinions are better than just one. If your agent provides you with a list price opinion and an appraiser provides another, now you can make an educated decision based on the evidence presented and move forward with confidence.
6. An appraisal is an effective marketing tool to attract buyers to a home because the prospective buyer can be confident that the property is worth what they are offering for it.
7. If a buyer offers a price that is below the appraised value, an appraisal can become an bargaining tool to help bring the offered price up to the value of the property.
8. If the buyer’s bank performs an appraisal that does not support the contract price, the pre-listing appraisal is a powerful way to dispute the bank’s estimate. I once appraised a unique home prior to listing; it sold in almost exactly the market time that I estimated and at my predicted sales price. The bank’s appraisal came in low because the bank’s appraiser did not focus on comparable properties that had as large a site or similar outbuilding. Our appraisal was used to dispute the bank’s appraisal, which helped the buyers obtain financing and the sellers maintain a higher selling price.
9. An appraiser might be able to point out some low cost improvements that could help your property’s marketability.
10. The appraiser is an expert who can be called upon for advice. Frequently our clients call with questions during the listing process. We are always happy to assist them in any way possible at no additional charge.
For more information on appraisals prior to listing, see Call an Appraiser Frist.
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