I had a prospective seller ask me "is paying for an appraisal a smart move?" They were selling an Oakland County lake house, but it doesn't matter whether it is on a lake or a home for sale in Novi Michigan I would give you the same information. Let me go through the pros and cons.
What is the best way to set the list price of your home? You never want it to set it way too low and leave money on the table. You want to get the highest price possible and sell your home relatively quickly if you are like most home sellers. You also do not want to set the list price way too high. When sellers do that they sometimes end up chasing the market down. The buyers sit back and watch your house come down and down. Then they offer you an even lower price. Many times when a house is overpriced from the beginning it sells below market value. No seller wants that scenario either. Should I hire an appraiser to set my list price? So is spending $400 on a professional appraiser a smart thing to do?
When you are in the beginning stages of thinking of listing your home, pricing your home may be on your mind along with what you have to do to prepare your home to sell. You want be thinking of all the de-cluttering that you have to do. What to sell, what to get rid off, and how to make your home appear larger is probably some of your questions. Then you are probably debating on what you should do to update and make your home look great. What is the best bang for your buck or how little can you get away with doing? Lots of questions to prepare your home to sell. Pricing your home is the most important factor in selling your home. Any house will sell once it reaches the right price point. Even the homes with bad layouts, horrible pet smells, or totally run down will sell if priced right. it does not matter if it is a Southeastern Michigan home for sale or a home in Houston Texas all homes will eventually sell once the price comes down to where buyers feel it is the right price. Market pricing comes about because of market demand. You can put any price on a home, but a buyer has to be willing to buy it at that price or you will be lowering it. Just picking a price out and saying your house is worth it because somebody sold one two years ago may not work. It is about recent prices and how your home compares to the homes that sold.
So should you hire a professional appraiser to appraise your home? Let me explain what a professional appraiser does. They come and look at your home. They write down how many bedrooms, how many baths, how many total rooms, room sizes, and size of the garage. They look at the basement and will write down whether it is finished or partially finished or unfinished. One thing the appraiser really does not look at hard is the condition of the house. They do not normally knock down or add value to the home unless it is extremely fantastic or extremely a run down house. An appraiser doesn't really knock off for backing up to a back road, or being able to see a cell phone tower, or having a bad layout. A professional appraiser really looks at the size of the house, the size of the lot and number of rooms. Then they compare it to homes that have sold in the last six months, in the area that are similar in style.
That is the difference between an appraiser and a real estate agent. They both look at the recent sold homes but in different ways. That is why an appraised value on home may be wrong. A home in average condition with a poor layout may appraise well, but never sell for the appraised value because home buyers do not like the poor layout. There is a subdivision in Plymouth Michigan. It has a huge cell phone tower on the edge of the sub. There are about 30 homes that either back up to it or has a view of this monstrous cell phone tower. The professional appraiser will do an adjustment large enough for the cell tower. Those 30 homes will always sell for less than the appraised value because buyers hate that cell tower. It is very hard to sell those homes with a view of the tower especially when it is right out the back door. The appraiser will use the whole subdivision where the realtor will price those homes lower because of the view.
I hope you are understanding that an appraiser and a realtor use the same sold homes to price your home, but the appraiser concentrates on numbers such as square footage of the house, and total number of bedrooms. A real estate agent will use that same information, but a real estate agent will know that a move in ready, totally updated home will have buyers paying top price in the subdivision. Sometimes buyers will over pay for a beautiful, updated, and move- in ready home. So we would be pricing the home higher than the appraiser possibly valued the home at.
So yes you can hire an appraiser to get a value of your home, but it may not be what home buyers will pay for it. It could cause you grief if the appraiser comes in to high. The best person to price your home is a realtor. Somebody that takes into account condition, layout, outside influences that may affect the sale of your home. You may have two trashy neighbors on each side of your home that may drive your value down. Simple things like that do affect the desirability of your home and ultimately the price your home will sell at.
I hope this help you understand how to price your home based on experience of a realtor, and recent market comparables. If you are moving to Michigan or just moving in Metro Detroit (in the same city or another nearby city) give me a call (248)310-6239
Russ Ravary
Your South Eastern Michigan Realtor
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