Sellers, the importance of understanding the appraisal process

Reblogger
Real Estate Broker/Owner with Wiegman Realty Group

This post on appraisals and the reality of it all is a great way to put things into perspective for sellers. The challenge is getting the seller to process all of the true facts while leaving out the emotion.  

Original content by Beverly Herdman

I hear it all the time,

 But my home has several upgrades and updates, vaulted ceilings, hardwood floors, granite, new appliances... the list goes on. 

What does this all really mean with the sale price and the ability to get a contract? 

To put it plain and simple all of those upgrades add the desirability. Yes, it adds value your home, because you will receive an offer much quicker than the another home that does not have the upgrades and is in comparison. It enables you to have more negotiating power, that is where your value comes in.

The reality in our current market conditions is the N VA market is demanding a higher price as we see multiple offers and escalations. This is coming to play because of the law of supply and demand. Lack of inventory, great rates, motivated buyers are frustrated with little to choose from.

The appraisers job is to prove what HAS HAPPENED to the market, ie, past tense. NOT what IS HAPPENING. 

When I go on a listing appointment and I am showing the potential competition within an entire zip code, and there are only a few homes in comparison. Yes, could we list at a higher price and most likely get that number, more than likely. BUT, remember that appraiser? They are looking at what HAS SOLD (previously), it doesn't matter that you may receive multiple offers with escalations. It also does not matter that you are upgraded. The appraisers are not able to take "normal" upgrades and updates in to much consideration because they have to rely on tax records and agent photos of the previous listings.

The importance of understanding the appraisal process and listing your home at the proper price is crucial to your NOT "chasing the market" If you list to high, be prepared to negotiate when that appraisal comes back. It is very difficult and most of the time impossible to contest an appraisal. Don't be a market chaser, it can cost you thousands of dollars listing to high and having to reduce. 

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Beverly Herdman Wine Trail Homes,LLC  Keller Williams Realty
Tel: 540-825-7441 | Mobile: 703-969-4280
beverly@winetrailhomes.com | www.winetrailhomes.com

Comments (3)

Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Author / Advocate/Short Sale

Helen... I take exception to some the statements by Beverly in her article.  The appraiser DOES have to understand the current market conditions, as well as past SOLDS to get an idea of the trend.  Appriasers do NOT look at photos from listing brokers, they are requred to take their own... for various reasons.

Thanks for reposing this!!

Dec 16, 2012 10:55 PM
Brian Ward
Lakewood Ranch, FL

I'm confused. Why are you listed as a Lakewood Ranbch realtor if you do business in Northern Virginia.

Nov 15, 2013 01:32 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Stopping by to wish you and yours a happy and safe Holiday Season!

Dec 24, 2014 04:25 AM