Appraised values of homes are definitely a barrier to a successful close in today's market. While the Fishers Indiana Real Estate Market remains strong, there are pockets of declining values in various Fishers neighborhoods. Appraisers are only going back three months currently and picking up those declining values in appraising current sales.
I want to talk about the definitions of Assessed Values and Appraised Values and how they both differ from a CMA (Competitive Market Analysis). An Assessed value is the value put on your home by the town's assessor and it is used for tax purposes. It is much more global in nature. The Assessor will not enter any homes and will not consider any updates or lot premiums. They typically use a much more global look at the properties. In many cases, they are not updated on any regular basis.
An Assessed value "may be" close to the market value of a home if it is in a Fishers neighborhood with very similar homes such as Woodberry or Brooks Chase. However, it is not of much value where there are a variety of homes and lot premiums or where there are older homes that may have updates.
Appraisals are performed by a certified appraiser; they most likely will enter the home. They will notice updates and will give extra $$ for premium items such as additional bedrooms, larger garages or nicer lots. Typically, they will not give what a buyer would pay for those premiums. For example, a third car garage will only get you about $2,500 from an Appraisor or a 1/4 acre lot to a 1/2 acre lot will get you an additional $2,500. However a buyer will often pay more for that third car or larger lot.
When you have a very unique home; sometimes it is worth determining the value from an appraiser prior to listing the home.
I have seen transactions this year where the appraisal has come in less than the agreed upon purchase price; so appraisals ARE coming in low. There are various solutions I have seen to this problem; let me know if you want more details on those options.
A competitive market analysis (CMA) is performed by a Licened Professional, in this case a Fishers Real Estate Agent. I will enter your Fishers home and do a thorough walk through and ask you questions about various updates. One of the major differences for a CMA is that I will consider the competition as well as the pended and solds in the area. In addition I will look at the absorption rate. I do this to price a home and to determine the validity of the sale price of the home when I am representing a buyer. This extensive homework can be used to "argue" the appraisal sometimes so be sure it is done when you list your Fishers home.
I would like to thank one of my readers for giving me this post idea; he had asked me to explain this and hopefully this is a bit more thorough than the email I sent. I encourage all of my readers to ask as many questions as you can to me; I want to be your resource!
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Cindy "in Indy" Marchant - Fishers Real Estate Agent
Keller Williams Realty Indy Metro NE
Fishers IN Real Estate Website
317-290-7775
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