Apr. 27, 2007 - The Value Of Appraisals

I am often asked about whether it is wise to get an appraisal before putting ones house on the market.  My answer would be yes, under certain circumstances and if you have money to burn.

Do you know what the definition of an appraisal is?  An appraisal is the procees of ESTIMATING a property's market value based on established methods and the appraiser's professional judgement.  Do you know what an appraisal is used for?  The appraisal substantiates the sales price of the property and assists the lender in determining maximun loan amount.

When I come over to talk about listing your house, I, as a real estate broker, am going to do a CMA.  That is an acronym for a Comparative Market Analysis.  That means that I am going to take a hard, analytical look at the houses that have recently been on the market in your neighborhood that are pretty close to being the same as yours.  I am going to look at the listed prices of what sold, market time, list price to sales price ratio and the listed prices of houses that did not sell.  After I look at all of that I am going to come up with an ESTIMATE of your property's value based on my professional expirience and judgement.  As long as there are some properties to compare yours to, I will be  doing a pretty dead on target job of coming up with a listing price that should help us sell your house for it's market value.  (Notice that I said "for it's market value", not it's full list price.)

If you have money to burn then you can go ahead and spend the $300-$400 it would cost for Appraiser's opinion.  If you have a totaly unique property then I would most likely insist on getting an appraisal before we listed it.  Otherwise, if you can find something better to do with that $300-$400 I would suggest doing it.  Most often, under normal circumstances, the only thing less valuable than a seller paying for an appraisal up front is a Zillow "Zestimate". 

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