Five Tips for Getting Your Home Appraised Before Selling
RealEstateJournal | Five Tips for Getting Your Home Appraised Before Selling
Price your home incorrectly and it could mean a long stay on the market, a final selling price lower than what the house is worth or both.
That’s why some homeowners are electing to pay $300 to $400 for an appraisal before putting their homes on the market, said Alan Hummel, past president of the Appraisal Institute and chief appraiser for St. Paul, Minn.-based Forsythe Appraisals LLC.
Presale consultations at the firm rose in the first quarter, he said, as the residential real estate market started to cool in many areas of the country and inventory increased.
Although real estate agents often do their own market analysis to price a property — and many times do a decent job — the appraiser can come in with an independent, unbiased opinion to make sure the price is right, Hummel said. In fact, if a property isn’t getting any serious lookers, an agent might even encourage his or her client to invest in the service for a second pricing opinion, he added.
The greater attention to precise pricing is a change from a couple of years ago, when a house could be listed at a lofty price just to see how much it would fetch, he said. “Now you’ve got to be competitive and you have to know that the offers coming in are reasonable.”
Also, if a property spends too much time on the market, the price it will be able to command often decreases, he said, as some buyers will question the reasons for the property’s inability to sell.
Through the Eyes of a Buyer
An appraisal will look at the home from a visual standpoint, taking into account considerations from the proximity to schools to cracking or flaking paint, Hummel said.
“We’re trying to react the way a typical purchaser would,” he said.
The appraisal also will analyze the health of the local real estate market, giving homeowners more personalized expectations for selling their home — a feature especially important with the plethora of national news stories generalizing the real estate market, Hummel pointed out.
Appraisers can also use a cost approach, which will determine the price tag on a new home built to the same specifications of the existing home, Hummel said. The comparison can be helpful for newer houses hitting the market because it lets sellers know what their home is competing with on the new-construction front.
Looking Back to Move Ahead
It also might not be a bad idea to dig through the file cabinet for the appraisal report you paid for when you first bought your home, said Michael H. Evans, president of Evans Appraisal Service Inc. in Chico, Calif., and a fellow of the American Society of Appraisers.
Few spend time reviewing the paperwork at the time it is completed, when people are primarily interested in securing the home and buying the house, he said. “They don’t go back and review that paperwork unless there’s a significant issue that needs to be addressed.”
Doing so, however, can remind homeowners of flaws found the first time around, and sellers might want to address curable problems before hitting the market.