Are you thinking about paying to have an appraisal before listing your home for sale?
Here’s the scenario. You’re planning to put your home on the market soon.
But how do you know it’s value?
You know you’re neighbors across the street recently sold their house but you think your home is worth more.
Because you recently updated your kitchen. But what you don’t know is that those neighbors also updated their kitchen and the master bathroom and installed a custom closet organizer.
Your real estate agent has provided you with the most recent comparables but you think your house is worth more so you’re considering hiring an appraiser to help you make a decision.
I can understand that sentiment, but unless your home is in an area where no two houses are alike, chances are the listing agent’s comparative market analysis should be pretty reliable.
While I won’t discourage it, hiring an appraiser may not be the best idea.
What Is A Home Appraisal?
People who are not involved in many real estate transactions, might not be familiar with home inspectors and appraisers and mistakenly use the terms interchangeably.
Although they both play an important rule in a real estate transaction they are evaluating it for different reasons.
Knowing the differences between the home inspector and real estate appraiser is essential, as they have to complete a very distinct task.
A home inspection examines the property’s integrity, condition, and functionality. The purpose of an inspection is to help buyer’s know what they’re getting into before the purchase.
In most cases, the buyers are the one responsible for paying the inspection. It is a safe way to know if the property they are interested in meets their standards.
While a real estate appraiser is the one responsible for the report of the monetary value of the property based on the fair market and the elements of the home.
An appraiser will check the major systems and the conditions of the property like the home inspector but less complete.
In order to determine the property’s value, an appraiser will use the comparable sales in your neighborhood and visit your home to gather information such as the number of bedrooms and bathrooms, property’s square footage, and any property damage.
Reasons Why An Appraisal Before Listing Rarely Helps
As a buyer, it is essential to include both home inspection and real estate appraisals. These processes are crucial in protecting real estate investments.
However, if you’re a seller, hiring and paying for a full-fledged appraisal before selling your property might be a waste of your money.
Appraisals Are Not Guaranteed In Value
For starters, an appraiser is like any other profession; some are excellent at their job while some may not meet your standards.
Some appraisers are diligent and study the market and may go as far as to work in a niche market. Others may only look at comps that may not really be comparable to your home. Many appraisers are licensed within DC, Maryland, and Virginia and may not understand the nuances of each. Real estate appraisal is subjective and a high appraisal from one appraiser doesn’t guarantee the same from the next.
Even if the appraiser comes through a referral of family/friends or you have a first-hand experience working with him or her, there is no guarantee that the appraisal will be accurate. It may give you an idea of what your home may be worth but you shouldn’t get stuck on that number.
Because the lender will hire their own appraiser and that’s the only number that will count. While your appraiser may be able to give you an idea of what your home may be worth unless you have an unusual and unique property it shouldn’t be difficult for your agent to assist you with pricing your home.
Most appraisals are a few hundred dollars that money would be better spent making a few minor repairs before coming on the market.
Your Agent Might Do Just As Well
Appraisers can make mistakes due to the unfamiliarity in your neighborhood, unlike a local real estate agent that specializes in a particular area. Having insufficient data or being on unfamiliar grounds may affect the appraiser’s value.
Typically, the method used by many appraisers to establish market value is to compare similar homes in similar condition that have recently sold. They usually get their information through Multiple Listing Service (MLS) that your agents also have access too.
Your Buyers Will Not Care
Buyers tend to be suspicious of dealing with second-hand information. They will always want their agents to analyze the comparable sales and the qualities and feature of the home and the neighborhood.
The Buyers’ Lender Will Not Be Interested In Your Appraisal
The buyer’s lender will certainly not accept the seller’s appraisal. The buyer will still need to pay a separate fee for an appraisal to obtain financing.
The lender will hire their own appraiser, just before closing, to confirm the first appraisals accuracy. Lenders today realize an excellent appraisal is merely an estimate of value, and estimates can vary.
Thinking of selling your home? Check out our 20+ step Guide to Selling Your House. Or you can contact me now to start the process immediately. Same day appointments are available on a case by case basis. I look forward to hearing from you.
More helpful information about selling your home
- Top 10 Signs Your Home is Overpriced via Sharon Paxson
- How Pricing Relates to Buyer Activity via Kevin Vitali
- The Secret to Selling Your Home for Top Dollar via Anita Clark
About the Author: The above article was written by Abraham Walker, Your Northern Virginia Real Estate Agent, helping clients market their homes to achieve high sales with a quick closing time is my main priority. He’s the co-founder of Ask A Walker and can be found on YouTube, Facebook, and HERE on this blog.
I can be reached via email at [email protected] or by phone at (703)539-2053. I’m happy to answer all your real estate questions.
I help people sell and buy real estate in the following Northern Virginia area cities & neighborhoods: Kingstowne, Island Creek, Cameron Station, Overlook, Alexandria, Old Town, Belle Haven, Fort Hunt, Mount Vernon, Springfield, West Springfield, Burke, Lorton, Woodbridge, Lake Ridge, Manassas, Annandale, Fairfax, Arlington, McLean, Reston, Herndon and of course Vienna.