Appraised Value vs. PERCEIVED Value

By
Real Estate Broker/Owner with DRA Homes | Cobb County Real Estate GA BrokersLicense# 277342
http://actvra.in/4M6Y

Appraised value may not be the same as PERCEIVED value.  It's a difficult concept for homeowners to Selling Your Powder Springs Homecomprehend when it comes time to list their home for sale.

Yes, being able to predict the appraised value with a high degree of certainty is very important when it's time to sell your home.  Appraised value is almost exclusively influenced by COMPARABLE RECENT SALES.  Yes, you read that correctly, SALES, closed transactions. 

Active listings and under contract listings are NOT comparable SALES.

A comparable property is defined as one that is similar in age, style, square footage, lot size and condition in an area that is PROXIMATE to the subject property.  Sales that are most recent and closest to the subject property and are most similar are given the MOST WEIGHT on the appraisal.

While the appraised value assessment is fairly clinical and follows an analytical approach, PERCEIVED VALUE is more subjective. 

Appealling to Home BuyersPerceived value is found in the EYE OF THE BUYER. 

When looking for a home to purchase, the typical buyer starts within a certain price range. 

Once the buyer has identified their appropriate price range, they drill down to a particular area. 

90% of buyers then start their home search on the internet.  Browsing available homes and COMPARING different neighborhoods and homes within those neighborhoods based on the photos presented. 

Buyers begin their physical inspection of properties with their expectations set.  They know what they can get within their budget and properties that do not measure up will be immediately discarded.

For example, if there are 5 homes available, all within budget,  in the same neighborhood of the buyer's choice, 3 of which have been updated to include granite, tile, hardwood, light fixtures, fresh paint and are well presented with attractive furnishings and 2 have not, WE HAVE ACHIEVED A DISCREPANCY IN PERCEIVED VALUE. 

While all five homes may actually be have a similar appraised value, the buyer sees things very differently. 

When a home DOES NOT MEASURE UP TO THE BUYER'S EXPECTATIONS they see:

1.  Potential for deferred maintenance on important mechanical systems
2.  A painting project that will need to be addressed immediately upon moving in
3.  Home improvement projects that they will not have the cash to complete for years to come
4.  A home that they will not be proud to show their friends and family
5.  A home that they DO NOT have to settle for

In short, they will just keep looking.

READ MORE...

 

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Jenna Dixon
Associate Broker
DRA Homes

Buy Cobb County Homes
JennaDixon@Outlook.com
(770) 374-4230

Fair Housing Act

DRA Homes - An affiliate of Maximum One Greater Atlanta Realty
5041 Dallas Highway, Suite 700, Powder Springs, GA 30127
Office Phone: 770-919-8825 ext. 318

 

 

 

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Groups:
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Cobb County Georgia Real Estate
Tags:
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Rainmaker
1,389,553
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Jenna Dixon,  I wish consumers realized that the real value of their property is based on closed sales rather than what their neighbor is asking or "said" that they got for their house.

Jan 28, 2015 06:42 AM #1
Rainmaker
325,396
Jenna Dixon
DRA Homes | Cobb County Real Estate - Marietta, GA
Assoc Broker - Let's Talk Cobb County Real Estate

Sybil Campbell 

 LOL you and me both.  Another thing that throws people off is new construction nearby.  Almost always, NOT a comp.

Jan 28, 2015 06:48 AM #2
Rainmaker
233,271
Faith LaRosse
Springer Realty Group - Wyomissing, PA
Realtor(R)

So VERY true Jenna.  It is based in true numbers-- a real calculation, not just opinion!

Jan 28, 2015 06:48 AM #3
Rainmaker
3,911,215
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Hi Jenna Dixon what a great job you did on this post.... nicely presented and very realistic....potential sellers do not have a good understanding of the difference between active, pending and closed transactions.... they're looking for the highest number!!! realistic or not....

Jan 28, 2015 07:06 AM #4
Rainmaker
325,396
Jenna Dixon
DRA Homes | Cobb County Real Estate - Marietta, GA
Assoc Broker - Let's Talk Cobb County Real Estate

Faith LaRosse yes, there is a science behind the appraisal but only emotion behind the BUY.

Barbara Todaro thank you for the compliment.  Sellers rarely understand the nuances behind the value.  Realistic numbers require a good product presentation to obtain the sale.

Jan 28, 2015 07:58 AM #5
Rainmaker
2,084,486
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Jenna. Great job with your post and a great topic. It is sometimes difficult to understand perceived value, as we cannot see through the eyes of a buyer.

Jan 28, 2015 07:12 PM #6
Rainmaker
325,396
Jenna Dixon
DRA Homes | Cobb County Real Estate - Marietta, GA
Assoc Broker - Let's Talk Cobb County Real Estate

Joe Petrowsky thank you.  It seems that with enough experience, agents can anticipate where the push back is going to come from.  Unfortunately sellers rarely heed the warnings...until they've lost weeks or months on the market.

Jan 28, 2015 09:02 PM #7
Rainer
169,403
Richard L. Sanderson
Richard L. Sanderson Consulting - Portland, OR
helping improve local property tax systems

Jenna:  Real estate appraisers say that sometimes a "capricious value" is attributed to a property. The term is typically used with items that have a sentimental value to their owners, but not others. Buyers, for any item, can make emotional decisions over logical decisions. This can result in a property appraising at a value less than the offer because "market value" is generally the value opinion developed and reported by the appraiser to the lender. And market value is from the perspective of the "typical buyer" of the type of real estate being value, not an individual buyer.

Jan 29, 2015 05:06 PM #8
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Rainmaker
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Jenna Dixon

Assoc Broker - Let's Talk Cobb County Real Estate
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