Home Appraisals: Avoiding Under Valuation
Home buyers are getting smarter. They’re asking for home inspections as part of the routine buying process nowadays. It’s not that home inspections are new. They’ve been around for a long time, as a business. It’s just that more homeowners are conscious of the importance of getting one. If you’re buying, that means you need to bone up on your home inspection needs, and if you’re selling it’s time to squeeze out the last bit of profit before the inspector sets foot on your soon-to-be-sold property.
The problem in real estate is that there’s a constant tug-of-war between the buyer and the seller. The seller wants to make as much money as possible from the sale of the home. The buyer wants to pay as little as possible.
There’s eventually a meeting of the minds, but not before a lot of gnashing of teeth and hand-wringing. There’s also a bit of egg-shell-stepping along the way. The buyer brings in a home inspector with the hope that the appraisal will come in low, and he can score a sweet deal on the home – after all, the contract is basically a done deal.
The seller is scared of the final appraisal because it’s sort of like a tag-team, 2-on-1 wrestling match. The buyer gets a freshman in the ring to pummel the seller, and the seller doesn’t have anyone to tag in for support.
Get An Appraiser That Comes From Your County
Sellers don’t have to just sit down and take it. They can hire their own appraisers. Yes, that’s right. Hire your own appraiser. When you call one up, tell them you’re thinking of selling, but you want an honest appraisal.
This gives you the opportunity to fix anything that might be broken or in need of replacement. It’s also a good way to get a feel for what the market will bear right now. You’ll be prepared for the buyer’s appraiser. But, you’ll also know whether the buyer’s appraiser is lowballing you.
Use The Appraisal To Guide Your Listing Price
Your appraisal should guide your own home pricing. Don’t let the appraiser dictate your home pricing, but use that valuation as a guide. So, for example, if your appraiser comes in and tells you that your home is worth about $250,000, don’t try to sell it for $400,000. Don’t try to sell it for $300,000. Don’t try to sell it for $275,000. Also, remember that a home valuation isn’t set in stone. The second you do any upgrades, you improve the value, and thus the potential selling price.
Always Question a Low Appraisal
Sometimes, you’ll run into a scenario where there’s been a mistake on the appraisal. Other times, there’s been some shenanigans, and your appraisal comes in mysteriously low. This is where having your own appraisal helps. So, compare what the buyer’s guy tells you with what yours told you. It might not match p perfectly, but it should be in the ballpark. If it’s a few thousand dollars off, it’s probably OK. If it’s $10,000 off, it’s time to start raising hell.
John Gast is a realtor with a passion for today’s market. From buying and selling to inspections and appraisals, he enjoys helping everyday people find success in real estate.