difference between a market evaluation and an appraisal

The message my good friend Loan Officer Vincent Redd sent me reminded me to share the difference between a market evaluation and an appraisal.

Appraisals can be done before procuring a Buyer to help a Seller to determine the value of  a home, but they won't be accepted by a Buyer's Lender if paid for by the Seller.  Realtors are well trained to provide market evaluations to Sellers as they are thinking about how to price their home to attract a motivated, willing, ready, and able Buyer.  Realtors present the most relevant homes primarily deal-pending, and sold within the last 6 months, very similar to the subject property, within a 1 square mile.

The report includes all the details about each property, including what the Sellers asked and what the Buyers actually paid.  The most vital tool to Sellers is seeing the negotiation trend in the marketplace, and how long they can expect it to take to attract a qualified Buyer.

When Sellers closely accept and follow their Realtor's recommendation, they can expect when they place their home on the market, they will be relocating in the near future.

Yesterday was a fun day for me.  I had a Seller get multiple offers on their home in Richton Park, and their home is selling for $3k more than what I proposed they could expect, and within the time-frame I recommended to them.

In some marketplaces there is just not enough sales activity to prepare an effective market evaluation.  As Vincent shares below, a Seller ordering an appraisal is the next best option.  I have included Vincent's contact information below, who is available now to answer your mortgage financing questions.  

If sellers are trying to determine the actual value of their property, they’ll want to consider getting an appraisal completed. An appraisal will determine the value of the home so that they can sell it for the right price and in a timely manner. Typically, a lender can refer an independent appraiser.

An appraiser will take the following steps to determine a property’s value:

• Determine the interior condition by conducting a room-by-room walk-through
• Walk the property’s length to determine the exterior condition
• Evaluate any amenities like a swimming pool, finished basement or appliances
• Take note of any health or safety violations
• Record the layout of the property

Whoever takes out the loan usually pays for the appraisal unless the contract states otherwise. If a seller is motivated, they might pay for the cost instead.

Sellers should think of an appraisal as an investment of money and effort. It’s important to know the value of a home and to ensure the seller arrives at a good price point.

Have a great weekend!

Office:(630) 748-7473

Efax: (773)  435-6468

Cell: (773) 255-1698

vincent@neighborhoodloans.com

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