Getting an appraisal before you list might not be the best idea.
With home prices fluctuating, you might be wondering if you should get an appraisal before you list. After all, it’ll give you an idea of what your home is valued at. It could even help you figure out an appropriate asking price. However, while an appraisal is an important step in selling your home, it’s usually ordered during escrow by the buyer’s lender. Getting an appraisal done too early may actually end up costing you money. Here are four things to remember about appraisals:
1. Home appraisals are mainly meant for the buyer’s lender. If a buyer needs a loan to purchase your home, the lender will require an appraisal toward the end of the loan application process to make sure the home is actually worth the purchase price. Lenders will not accept an appraisal that the seller did at the time of the listing.
2. The appraisal value isn’t the same as the market value. The market value is what someone is willing to pay for a property, which can be influenced by the buyer’s emotions or by multiple buyers competing for the home. An appraisal aims to determine the property’s value that reflects condition, age, location, and other relevant characteristics. These two values can be very different. While agents and appraisers both use comparable sales, the market value is the one you sellers should be most concerned with. A good agent will find out what pending sales are closing for and what upcoming listings may be competing with yours to make sure your listing is at a price that will attract the greatest buyer interest.
“If you want to sell your home, set a list price to attract the most buyer interest.”
3. Getting an appraisal can be expensive, depending on where you live. They can range from $300 to $700, and if you have a very large house, you may end up paying even more.
4. Getting an appraisal done ahead of time might end up losing you money. If the appraised value is higher than the market value, and you base your list price on the appraisal, your home could sit on the market for a while, and the value will decrease in the eyes of the buyer the longer it sits.
If you want to sell your home, set a list price to attract the most buyer interest. This price is always the market value. If you’re thinking about buying or selling, please don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.