Is it the Appraiser's job to Show that the House is worth the Sales Price?
Several years ago when it was a strong Sellers market, the prices continued to go up, up and up. The Sellers and their agents continued to press the Price Envelope not knowing when an appraiser would push back.
In today's market, many homes have lost large amounts of equity and Sellers still try to push the price to avoid bringing money to closing. Unfortunately, many Agents let them. We've probably all been guilty of having a listing a little high. Sometimes we agents just have a difference of opinion. I've worked certain neighborhoods and have seen ALL of the inventory. It helps me to price the homes correctly and to help Sellers truly understand what's happening in their neighborhood.
This happened recently:
I put a 1960's ranch on the market near the top of the price range for the neighborhood. There was no inventory and this is a VERY sought after neighborhood. The Sellers had taken excellent care of the house and had updated many things. But the updates were not in line with the quality one would expect in this neighborhood. Not as bad as Lipstick on a Pig, but not what a Buyer would expect when the MLS says "Updated".
We quickly received an offer on the house. It was workable, but the buyer wanted to come back and see the house again before they responded to our Counter Offer. During this next visit, they started having second thoughts. The roof was older than they remembered and maybe the house was over priced too.
At this point, I was very thankful that I had a great relationship with the other Agent and we weren't pointing fingers at each other. After a couple of days of negotiating we came to terms on a price with full knowledge that the house had to appraise for Sales Price.
This is where I think many agents drop the ball. You came up with this price with the Seller, now you need to help justify where the asking price came from.
I always meet the appraiser at the house with the comparable sales that we used for pricing and an explanation WHY we used them. Then I shut up and let them do their job.
Many appraisers have not seen all the recent sales in the neighborhood. With the new lender rules, many have never even been IN the subject neighborhood. I am never pushy with the information, I just politely ask if I can give them the information that we used to price the house.
When an appraisal comes back low and the appraiser asks for more information, your chasing the cows after you've left the gate open, in my opinion.
Thankfully, in addition to the comparables, the appraiser asked for a list of repairs, updates and some other things that he felt gave the house value.
The house appraised fine and a Happy Ending was Had By All.
Connie Harveyis a local agent with Pilkerton Realtors, serving home buyers and sellers in Nashville, TN, Brentwood TN, and Franklin TN. Let her help you realize your Real Estate goals. She can be reached at 615-371-2474.
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