Should You Get A Pre-Listing Appraisal?

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Should You Get A Pre-Listing Appraisal? 

A pre-listing appraisal is an appraisal that is prepared before listing a home for sale. Its purpose is to provide an unbiased professional opinion of value to set a market-based list price. It’s in your best interest to have an objective third party’s opinion of value before signing a listing agreement. A pre-listing appraisal will give both you and your agent an accurate description of your home’s specifications along with a detailed analysis of the most recent and similar comparable sales in your market area. It will help to set a realistic selling price for your home so that it will attract buyers. 

A certified appraiser is the one person in the transaction that does not have “a dog in that fight.” The seller wants to make as much money as they can, and the purchaser wants to buy the home for as little as possible, the bank makes money off the loan, the realtors will get a commission if the sale closes, and the loan officer will earn a commission as well. The appraiser, however, is not motivated by the closing of the property. Whether the property closes or not, the appraiser collects their fee, and it’s not contingent upon the property selling for at a particular price. The appraiser does not have an agenda and is not an advocate, which creates independence and unbiased professional opinion of value for your home.

What Does The Appraiser Do?

An appraiser will compare your property to similar properties that were recently sold in your market area, to arrive at the market value for your property. As a seller, it is essential in this market to make sure you are not underpricing or overpricing your home. Not pricing your home competitively could mean the difference between leaving money on the table, never selling your home, or your home remaining on the market much longer than you had anticipated. 

and there’s never a time where we aren’t greeted with good mornings, have a great day and smiles. I have this as the first pro in the blog post for a reason. I really do love the sense of community I feel here. You never get the feeling that somebody has an ulterior motive for being nice, plain and simple good people, just the way we like it.

What Is The Cost For An Appraisal?

The cost of an appraisal can vary widely, depending on the area of the country, location, size, type of property and complexity.  Typically appraisals will cost between $250 to $600. An appraiser will do preliminary research to determine the cost based on your address, available comparable sales, complexity, and the type of report you need.

What Can I Expect To Get For My Money?

Along with an appraisal report, which states a current market value or range for your home, you will also get a detailed sketch, so both you and your realtor know the exact square footage of your home. I can’t tell you how many times public records are incorrect in regards to the square footage. 

Marketing your home with the correct square footage could mean the difference between thousands of dollars in your pocket.  Public records are inaccurate 7 out of 10 times in regards to square footage. In many instances, the home is larger than what public records indicated. 

Most realtors will use public records square footage in their MLS listing.  For example, if public records are a hundred square feet off, your home could be marketed as smaller then what it truly is. Think about that for a minute; if public records are incorrect, your home could be marketed as “less than” was it truly is.  It could mean the difference of thousands of dollars to you as the seller.  

On the other hand, if public records show your property as larger than it is, your home could be marketed for too high.  For example, you could have a buyer, be in escrow, and find out during the appraisal process; the home is smaller than all parties had anticipated.  It could potentially blow up the whole deal because the true comparables may be lower-priced sales. This can potentially be avoided by having a pre-listing appraisal with the accurate square footage.

*** If you do not need a full appraisal, we do offer the service of just providing the sketch of your home before listing.

Negotiating Tool For Potential Buyers

A pre-listing appraisal can be utilized as a valuable negotiating tool for potential buyers. A pre-listing appraisal from a certified appraiser can offer tangible proof in the form of comparable sales that will help to defend the listing price. The agent can provide the appraisal to the bank’s appraiser for your buyer. Most appraisers appreciate this as it is a reference when they are completing the appraisal for the purchase.  If you have a cash buyer, the report will help them feel secure, knowing the home is worth what you have agreed upon.

*** It’s important to note; most banks will not accept a private appraisal, as most banks want to order their own appraisal. 

Reality Check

Many sellers think their home is worth more than it is. Having a neutral and objective opinion of value may be just what a seller needs. On the other hand, a lot of sellers are shocked when they find out that the market value of their home is more than they planned. So investing in a professional appraisal will allow you as the seller to know where you stand. Overpriced homes do not attract potential buyers, and it’s typically a bad idea for a home to sit on the market for an extended length of time. Every month your house stays on the market, it is another month you have to pay the mortgage.  

Extensive Improvements or Renovations

If you have made renovations, additions, or recent improvements to your home, it can be more difficult for you to determine a selling price.  A pre-listing appraisal will take these improvements and changes into account when determining the market value for your home, avoiding long days on the market or numerous price reductions.

Potential Issues or Improvements

An appraisal can help to point out potential repairs or deficiencies that could be taken care of before the sale, such as FHA deficiencies or repairs.  This forethought will help to provide a more streamlined closing. There are cosmetic improvements which an appraiser can recommend, which could potentially add value to your home.  Not all of the cost of renovations will give you a dollar for dollar return. It’s important to know which improvements will provide you with the most bang for your buck when selling your home.

Unique Property 

If your property is unique, and there are few comparables, a pre-listing appraisal can save you from leaving thousands on the table and give you the confidence that you are pricing your home competitively.  Having that appraisal once you find a buyer can prove to be an asset because it can be handed over to the bank’s appraiser for added assistance and support for the market value.

How Long Is The Appraisal Good For?

The appraiser’s opinion of value is for the effective date of the appraisal. If the market is stable, then not much may change between the time the appraisal was completed and when it goes under contract.  If additional sales close after the effective date, this could result in a higher or lower value than the pre-listing appraisal. The appraiser typically will include pending and listings, which can help with determining the direction of the market.  Many times these pending sales or listings may be closed by the time your home goes to escrow.

 Your home is most likely your most significant investment. Protect your investment by hiring an appraiser to provide you with an unbiased, professional opinion of value, and then hire a realtor to help get your home sold.

If you would Like to order an Appraisal on your home please contact Christie Daniel @ 951-760-3677. She is a 20+ year appraisal veteran and knows the Southern California area very well. The area’s she has done many appraisals include the Inland Empire, North San Diego County and South Orange County. Cities include (Menifee, Temecula, Lake Elsinore, Murrieta, Riverside, Corona, Eastvale, Perris, Moreno Valley, Homeland, Fallbrook, Vista, San Marcos, Oceanside,). 

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