Home > Blogs > Mark L. Ostrovsky > Mark L. Ostrovsky's (marcopolo) Blog

DO I GO WITH THE REALTOR'S PRICE OPINION OR THE APPRAISER'S?

By Mark L. Ostrovsky

Real Estate Agent with Howard Hanna Real Estate Services

January 09, 2010 12:26 AM

"My house appraised at an amount higher than my real estate agent claims it's worth. Do I go with the Realtor's price opinion or the appraiser's?"

Perhaps we're conditioned to believe that there's no better answer than one that's scientific. But don't be blinded by science! Real estate appraisal is not a science! It's actually a sort of blend of art and science and the results can be subjective.

Appraiser

An appraisal is a supportable opinion of the "approximate" value of real estate at a given point in time. This definition alone should leave you asking questions. Sure appraisals are based on "educated opinions," but they're merely approximations of value and, believe it or not, are considered valid for one day only. It's also a lot easier to appraise value in a stable market than in a market where prices seem to change almost weekly; a market like the one we're weathering right now.

Appraisers adhere to uniform standards. They're often self-employed and work for a fee, or they may be salaried employees who work for a bank or for some governmental entity. Lenders hire appraisers to determine property value for investment and/or mortgage purposes.

Ultimately it's the market that determines value because value is what the market is willing to pay for a property at a certain time.

Ask any real estate agent and they may tell you that they occasionally receive a phone call from an apparently stumped appraiser, inquiring whether a particular property could sell for a certain amount. This in no way suggests that agents are more knowledgeable than appraisers, but that appraisal has a guess-work component, and that agents actually sell houses for a living and hopefully know their market.

FIND A HOME: http://markostrovsky.com/

Re-Blog

Comments(10)

Comment

Show All Comments

Sort:

Al & Peggy Cunningham, Brokers

RE/MAX West Realty Inc., Brokerage - Brampton, ON

Our Family Wants To Help Your Family!

You nailed it! But Owners will go with an appraiser if their price is higher or the Agents if theirs are! We liked the way you pointed out that the appraiser's value is truly only good for that one day and yes, we get calls from appraisers like you outlined many times.

Jan 09, 2010 12:30 AM

Barbara Todaro

RE/MAX Executive Realty - Happily Retired - Franklin, MA

Previously Affiliated with The Todaro Team

Mark & Elly....you're right....appraising is not an EXACT science.....the local real estate agent usually has a better handle on what the actual local market will bear.

Mandy Buchholz

Benchmark Realty, LLC - Murfreesboro, TN

Good job! Homeowners need to know that appraisals are usually a little high when refinancing or just requesting their own appraisal.

Jan 09, 2010 12:31 AM

Joseph Welusz

QuoteMatcher.com - Evesham Township, NJ

Both go hand and hand. This is a question that alsways comes up with buyers in NJ because appraisal value are usually very different than market value. As an agent you need to educate your sellers on comparable in the area and how long they have been on the market. Then you need to go along with what the seller wants to do or walk away if you think you are wasting your time.

Jan 09, 2010 12:32 AM

Monika McGillicuddy

Berkshire Hathaway HomeServices Verani Realty - Hampstead, NH

Southern NH & the Seacoast Area

I think the appraisers just look at solds for value where we look at on the market/competition for listing prices. Sometimes in my market there is a big difference between the two.

Jan 09, 2010 12:44 AM

Roy Kelley

Retired - Gaithersburg, MD

Getting another opinion in these situations is a good investment. We are finding that too many appraisers are sent from other markets.

Jan 09, 2010 12:45 AM

Anonymous

With the new "spin the wheel" method to determine the appraiser the lender will use mandated by the new regs. we are seeing folks that have no idea of the area. It would be nice if the same house was worth the same whether in Downtown Nashville or Franklin...but that isn't the real world.

Jan 09, 2010 01:05 AM

Raylene Estabrook

Signature Homes Real Estate Group - Yarmouth, ME

I recently had an experience duringa short sale .The lender holding the sellers loan and buyers lender both hired appraisers. Their appraisals differed by $11,000 on a home under $200,000. They where both qualified local appraisers with over 30 years experience. This showed me the new guidelines have not corrected anything. Appraisals are opinions and opinions tend to vary.

Jan 09, 2010 01:16 AM

Jody Lautenbach

Century 21 Premier Associates - Pella, IA

I've had this same situation and they go with the appraiser's price and it sits on the market. Another items I always tell them is that I actually see inside the homes that are used for a CMA or appraisal. I know all the features and high points and low points. The appraiser has not seen the other comparable properties and just sees what is on paper. That can be a big difference. Good Blog.

Jan 09, 2010 01:36 AM

Mark L. Ostrovsky

Howard Hanna Real Estate Services - Beachwood, OH

Howard Hanna Real Estate Services

Oh yes, we too just love it when lender sends an appraiser from the other side of the moon to appraise one of our listings. Many clearly do not and cannot understand, or possibly know, the little nuances and differences from one block to the next where prices can vary dramatically.

Jan 09, 2010 01:54 AM

DO I GO WITH THE REALTOR'S PRICE OPINION OR THE APPRAISER'S?

Comments(10)

Mark L. Ostrovsky

Service Areas

Real Estate Resources

Recent Posts