Sellers sometimes decide to get an appraisal so they'll know what their house is worth before putting it on the market. This isn't always the best option since an appraisal gives the impression that there is one "real" value and may set unrealistic expectations about what they'll actually get for their house. Sellers who are convinced by the appraised value may hold on to that price in spite of the lack of showings and no offers and feel gypped if a buyer offers less than the appraised amount.
An alternative is a Comparative Market Analysis (CMA), which is prepared by a Realtor based on homes in the MLS system. CMA's normally include recently sold comparable homes to see what worked, the current competition to see what else buyers will look at in your price range, and recently expired listings to see what didn't sell.
A CMA is probably a better choice than an appraisal for determining list price for the following reasons:
- CMA's give homeowners additional information about current competition that helps the seller make an informed decision.
- CMA's give a projected selling range which helps sellers realize that there isn't a fixed value for their house and reinforces the idea that the market will ultimately determine the price/value for their house.
- CMA's are free. There are lots of expenses related to selling a house and appraisals in Tallahassee can run $350-$500.
You can get 2nd and 3rd opinions (CMA's) from top Realtors for little or no cost.
- CMA's are usually easy to read and understand.
It's important to get a professional opinion on price before listing a home, especially in a slow market in which most homes aren't selling. A CMA appears to be a better choice for setting list price than an appraisal for the reasons listed. In addition to preparing a CMA, Realtors usually provide information on estimated selling costs and helpful tips on preparing a house for sale, so it's a good idea to get a reputable Realtor's advice on pricing and selling a house.
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