Need CP expertise - Selling a home: Do you get an appraisal before listing your home?
 

Or do you go with what your agent recommends?

We have an agent who is very experienced but I'm just not sure what I should do here. She has done a comparison analysis on our home and similar homes that have sold recently in the area. She gave me the three addresses and what they sold for and they were right in line with what she said. Her recommended asking price is about 7-14% less than what I thought it should be. We have done some things to the home to make it perhaps a little more valuable than when the last appraisal was done 5 years ago. Her recommendation was 7% less than that appraisal 5 years ago.

Should I spend the money to have a new appraisal? Keep in mind that what she said was just a recommendation. She did say that we could ask for more. But she said we should be willing to go down on price if it doesn't sell. I do want to get the house sold quickly as we have already contracted to buy a new house on the 25th and I really don't want to have to pay 2 mortgages for very long.

Appraisal isn't likely to change what the house actually sells for to be honest. The comparables usually set the homes value, it only needs to appraise enough to cover the loan someone is going to take against it.

My $.02

Price it to sell and move on.

Nope. Buyers will end up getting an appraisal that will determine the true value of the home unless they are paying cash.

This.

There's a reason appraisals are usually not done till after the inspection has been completed. They don't matter to the sale price. It's only for the loan.

Save yourself the money and have your agent list it for what you think it will sell for. If you don't get a bite, you can always lower it.

You don’t have a hair on your ass if you ain’t carrying two mortgages. It’s the American way. Only thing better is three. **** a bunch of debt to income ratio.

it couldn't hurt; just so you have a general idea, so you can evaluate the offers / how much cash they're putting down etc..

so if, the asking price is 100k (using simple math here), and it appraises at 90k; and you get an offer from someone for 105k who is only putting like 3% down and financing the rest; you know there's a good chance their loan would be more than appraisal and the loan wouldn't go through; by the time this is discovered, you could be 3 weeks into the process and a deal fall through then you've lost time on the market and have to list it again. I think you could keep the earnest money at the point of it falling though, but time lost on the market would be more of a concern to me than $1k in earnest.

if the offer/contract is 'close' in terms of what an appraisers comes up with, my opinion the appraiser just says "yep, it appraises" for exactly the sell price so the loan will go through. obviously, it's there a large gap, the probably don't do that. in our case, our offer was about 3k more than what we thought the house would appraise at, but we got the appraisal back, and it was appraised at exactly our offer. lol.

Just throw a match to it like the Chiefs season and move on

This is good advice.
We are currently going through this with Moms house that transferred to us kids upon her death.
The comps the realtor gave us were for homes similar to moms that sold and property only (there's 3 acres) that sold. After discussion amongst the 4 of us we decided to list the house and property at a higher price than what the realtor recommended and drop it after 3 weeks if we get no offers. It's prime property in Shawnee but the house will need some work so this gives us some negotiating room but should still allow us to get at least the appraised value.
Good luck Lzen!

ROFL

Remember that Game of Thrones conversation about where power lies?

That but power is the value of your home. If you want the perceived value go off the assessed value for your taxes.

If you want the real value, it's what the seller will pay. Then they will try to get an appraisal for as high as possible to give them as much equity as they can with their loan.

In short don't waste 500 bucks on an appraisal that won't matter one iota.

lots of buyers in your market, or are you just getting out? best plan is to price it really low and incite a bidding war. you'll get a ton of eyes on it, and eventually the price will rise to where it should. nothing forces you to accept the offer you know is low and below desired ask.

Just went through this process.

Unless you have a long/ongoing relationship with your realtor, and have 150% trust in them - I would highly recommend speaking to a couple other realtors to see what they think they can get for the house.

Realtors will say a number to get you excited.......when in reality, they may not be able to get close to what they quote you.

The market will dictate, but you need some honest feedback from your realtor.

Okay, I think we will list it for a bit higher than the agent's rec. and lower it if it doesn't get any offers the first 3-4 weeks.

Thanks for the advice, everyone.

And Dayze, I did take your comments into consideration. However, the appraisal 5 years ago tells me that we still won't be asking for more than it should appraise for.
But that got me to wondering about the offere we put in on the new house. They chose ours out of 3 total offers. The appraisal on that was done on Friday. I'm curious to what that value will be. We should see it here in the next day or two, I would think.

If you are selling it on your own, I found they are valuable to have. I got an appraisal on a foreclosure after it was finished that I sold. I listed on Zillow. I shared the appraisal with the interested buyers and told them what a real estate commission 7% would be and that I would give them 3% off the appraisal if they bought direct. I ended up selling it this way. The new appraisal for the loan came back $500 higher. It was a win win for both and I sold the house very quickly this way. You can use zillow comps and have the same strategy, however, an appraisal done within 30 days for $395 turned out to be a good investment as it added immediate credibility to the value.

Yeah, funny thing about the county appraisal. It is quite a bit less than the actual value. They don't bother to check unless you have done something obvious. We put on a new deck a year ago (replaced an old limestone/concrete porch that was starting to fall apart) so I'll bet that they will want to reappraise it soon. But luckily, it won't be ours by the time they get around to that. :D

Also getting an appraiser that's on your side won't tell you the true value of the house. They'll just look at square footage and bedrooms / bathrooms, pick the three best selling houses in your area as comparables and go with that price.

But it won't say which house had the renovated kitchen or the open concept living area or the huge island that everybody wants. It won't say, basically, what your house really will sell for.

Well then thing about the realtor is that she is my good friend's step mom. We have known her for many years. But we have never used her services until now. She does co-own the real estate agency from what I understand. She has been doing it for a long time. In the process of getting our new home I have seen a lot of good from her using her experience in this field. So, I do have some trust in her. But I just don't know that her asking price rec. was in the right place.

So you as a homeowner thinks your house is worth more than a professional realtor who sells homes in your area and has provided you with comps.

It sounds like you want someone to come to you and say 'Your house is worth 5x, want to list with me?"

Your house will then sit on the market and you will be pissed not at yourself for not listening to the first realtor but at the second realtor for not selling your overpriced house fast enough.

Remember one important thing: you do NOT have to accept ANY offers. If you start getting a lot of action then your price is good/cheap. If you get NO action you're over priced.

You should start seeing traffic pretty soon after pricing your house at fair market value and no bank is going to provide a mortgage if the appraisal is too low versus sales price.

FYI - Zillow can be incorrect. so if you using it as a VERY lose ballpark then yes. Otherwise, go by a market analysis.

Also, if a house doesn't appraise high enough theres wording in the contract for renegotiation. There can also be wording in the contract that says if it appraises higher, the seller cant negotiate a higher price.

Unless your fronting the bill for your own appraisal, you most likely will never know what your home appraised for. You would only know something was up if the amount was way low. Since the buyer is technically paying for that appraisal.

So unless your talking about an expensive piece of real estate i dont think its worth your money and effort. A proper market analysis will be more valuable. Just my $.02

Most important question: What is your goal?

Summed it up quite nicely/accurately.

Every homeowner thinks their house is worth more than it is. Market and comps nearly always dictate sale price, and is also what any buyer-rep realtor will use to advise their clients, as well. So, even if you price it higher, the comps will almost certainly drive the price back down.

Also, having a house sit on the market will further devalue it, and overpricing it initially could potentially hurt you.

Just things to keep in mind.

Not necessarily true. It depends on the price point. homes in KC around 300K and below go faster than Ty Hill on a go route. Homes around 400 on up can take a little while longer. you may get lots of activity but unless your getting a bunch of offers, the traffic alone does not have to reflect your price.

Hey hole!

The second half of your post was good. Thanks for that. However, on the first half, it appears that you did not read or comprehend the part where I said the appraisal 5 years ago was 7% higher. Plus, the home has had a few updates/upgrades since then which would make it even higher. But I'm not even talking about going that high, just the 7% difference from 5 years ago.

thats a relative time frame though. if your house sits on the market for 8 - 10 months and is worth/priced around 1.5M (depending on location/market) thats vastly different than a house listed around 150k sitting on the market for that long. so yes it CAN be a negative to have a house sit on the market but so many factors go into it....time of year...regional market(is that location/area blowing up or is it on a down swing.

too many folks freak out when there home doesn't sell on the first day. also, some homes sit on the market because a seller wont negotiate.

That being said...being overpriced COULD hurt you. theres one of two outcomes when your overpriced.....#1 very little traffic #2 You get offers but based on your price they seem "lowball". you are spot on!

"I've done an appraisal of your house. The value is XXX"

"Hmm that seems really low."


/every episode of Love It or List It ever made.

Understood. And good advice. Of the 3 houses that she used, only one seems to be a pretty close match, IMO. And that one sold for the price we are going to ask. So, I think we will be okay.

After having looked at homes for the past couple of years or so on Zillow, Realtor, Trulia, etc. I've seen enough to realize that having a home on there too long is a red flag to buyers. I'm guessing that is why many of them take it off the market and then put it back on a month or few months later.

You go by realtor market analysis.
ask 95-100% of her analysis.

It wont matter at the end and whomever you strike a sale with will have to do an appraisal for loan purposes. That appraisal may be less or more than one you have done.

To get it sold as quickly as possible but also get the value that it is worth. Don't want to leave thousands sitting on the table.

we had a similar issue before relocating to DFW. we wanted to get the most but we also wanted to start construction on our new build. If it wasnt for timing we could have held off and not sold as fast. I had a place to live either way but i did not want to hold 2 notes for different properties. so the timing of that comes into play. just make sure your realtor doesn't relay that info. you lose a lot of negotiating power if they catch wind that you more or less "have" to sell very quickly.

It's things like this that make a real difference when it comes to using an agent... if the appraisal comes in low and the buyer can't make up the difference, they'll get creative and figure out how to make it work.... versus simply saying you might have to go down in price or whatever.

But yeah, the buyer will do one anyway and a month from now there could be other examples out there and it would be redone anyway, so there's really no point.

And you can do some math on it when it comes to taxes/etc. paid on that mortgage that you won't get back when you sell, versus differences in price, to tell you what makes sense and how long you can wait and still make it worth it, and when you should drop the price to sell.

Appraisals are one of the biggest scams in the Real Estate business. I've bought and sold at least 40-50 properties in my lifetime. The appraiser always wants to know what the contract or sale price is and the appraisal comes in at that amount or a little over. EVERY TIME.

If you're getting an appraisal on your own without a contract or established sales price then the appraiser will base the price on comparable properties in the area. Price per sq/ft is what generates the price. You can get that figure on your own.

THE SLUM LORD SPEAKS!

Went through the same thing when we were thinking about selling our last home. The comps they were bringing me were close in square footage etc, but none had the updates like i had done to mine. First realtor suggested around 180k....uhhh no. Second was hovering around 190-195k. We were thinking well over 200k. In fairness I still had quite a bit of work to do to the place but i couldn't help but wonder if they were more concerned with a quick, easy sale than getting us top dollar. We ultimately pushed for 205k and sold it in 3 days. Still feel like we should have pushed for more since we didn't have another place in mind yet and not in a hurry to sell, but dealing with showings gets old pretty quick. And in the end we ended up in a far better home so I'm at peace with it.

Bottom line is it's YOUR house and the realtor is working for YOU and if you don't like what they're telling you you can keep looking around. Just make sure you're being realistic in your expectations.

If you are in a market with Offerpad, Opendoor or Zillow Offers request free offers. Easy. If you like the offer pick your closing date and skip the bullshit hassle of listing your house.

This is true. Also, an appraisal is not an offer. They don’t mean shit.

Appraisals are the PFF ranking of your home.

Doesn't matter. Buyers bank will do the appraisal and that's Bible.

We just sold out home and got ****ed on that. Like I mean they just made shit up and used houses not even our size as comparables.

Nothing we could do except ask the buyers to pay out of pocket for the difference the bank wouldn't loan. Wasn't worth it told them to pay the closing cost then and sold it.


Price it for what the market is at.

Sent from my Pixel 3a using Tapatalk

All of this, but also, know if your upgrades are things buyers want. You won't get a dime out of people for weird upgrades they'll just have to pay to redo for themselves. I was buying a downtown KC condo and there was one that I made an offer on, but the sellers were deluded that they were going to recoup for the very unusual and impractical wood they used on the floors. 99 out of 100 real buyers would go in planning to replace it. They opted to wait for the 1 out of 100. It was on the market for over a year and finally went for less than the offer I made them.

The above advice to "Just make sure you're being realistic in your expectations" is the best advice of all.

I furnish pictures and have a friend do what's called a "drive by". He drives by on Google, sees several year's views, and looks up comps based on school district, city and past sales of same condition/ sized homes.

I squeeze a C note into his palm for the info. I always listed at 8-10% over appraisal.

Realtor's do have a nasty habit of pricing low when in their the house is a dog. Smallest house in sub division, in a poor quality school district near a good one, or any of the other hot buttons they sell around. run down neighborhood, main street, no sidewalks.....

Caldwell Banker used to have all branch agents tour every home, listed the previous week, and suggested selling prices. The broker actually set the price that was recommended to the seller.

Ask what you want, accept what you want. Offers you accept define value not some realtor skank looking for the listing commission

If you have made improvements to your home that might affect it's value, it may be worth it.

Even then, just because it may be something buyers want, it doesn't mean it's something they'll pay extra for. I had just rebuilt the 18'x12' shed and renovated the garage the past couple years....didn't really net me an extra dollar. The spectacular renovated kitchen OTOH absolutely did, and it's probably why it sold so quickly.

And yes, there are some that can be turn-offs. You never want to personalize your home too much unless you plan on dying in it.

As long as you’re in some kind of neighborhood or area with similar homes that have sold in the last 90-180 days, then the comps your agent showed you should be sufficient. About the only time I recommend an appraisal prior to market is if comps are hard to come by or you’re trying to sell a unique property or one where you have over-improved it compared to your neighbors.

Skip all the bullshit and put it up for auction

True story. Just bought a house and the appraisal was all based on comparable property in the same area with the price negotiated for repairs.

This

just check zillow.com

what you think its worth doesnt matter. what the sellers appraiser thinks its worth will determine how much money a buyer can borrow

I'm not sure how much you're borrowing even matters.We put $144k down on a $223k house and it still had to appraise out at the selling price. Makes no damn sense to me.

This is EVERYONE'S goal.

If you already have a house you've contracted for and are going to be paying a 2nd mortgage, don't jerk around and pay months of extra payments.

Price it at market - a few thousand under to get action and possible bidding on it.

Those comparison homes always drive me nuts. There are no homes in my area that compare to ours. Our comparisons always end up being homes that are smaller than ours due to a lack of 5 bedroom homes in the area. It's bullshit.

Oh and they almost always compare it with homes that don't have finished basements.

The kitchen is modernized although that was done 10 years ago. Still, it looks better than the only comp she provided that looks very similar to mine. The bathroom (minus the tub/shower) was redone last year. The front porch used to be a concrete top, limestone porch that was starting to crumble and so we replaced it with a nice wooden porch/deck a year ago. At the same time, the sidewalk leading up to it was replaced.
Also regarding garages and the comp I mentioned, mine is twice the size of that one. We have two backyard patios to enjoy. I think those are good selling points but I'm by no means an expert.

That's the kind of thing that we're dealing with. Also, we have a loft that was converted to a bedroom. So, that makes it a 3 bedroom home. But they say you can't list it as that so they have to call it a bonus room. But there are no comps that have that. I feel like I don't want to leave money on the table but at the same time don't want to be an idiot and not listen to my agent who has a lot of experience. :banghead: I hate this process.

you can challenge the appraisal if it comes back low. My wife has had to do it a couple of times (shes the realtor) as i have stated a couple times and as others have mentioned...since the buyer is paying it you wont know what your home appraises at unless there is an issue.

your realtor should be able to help.

Yes, zillow is useful but it is not perfect. And my point was that I did a refi 5 years ago. There was an appraisal done then. They used comps for that appraisal then as well as doing a thorough inspection of the home. Since then, the home has gotten some things fixed and/or upgraded. So why wouldn't the home be more valuable than even that appraisal? But my agent gave me a suggestion on a price to list it which is about 7% lower than that appraisal. It just doesn't make sense to me. But like Rod said, my home is more unique and it's a little difficult to find a home that is similar. It's old and back in those days they didn't do cookie cutter houses.

I would never trust Zillow for a true estimate of price.

yep, once good thing zillow can do is give you a good visual representation of your local area and what properties are listed at. your realtor will have more accurate info but it could give you a mental picture of how you stack up against your competition.

Yep. Zillow lists my home way above market value because it heavily relies on total square footage. The county only utilize compatibles and last known assessment.

According to Zillow I own the most expensive house in the neighborhood.

obviously you undervalue your grand mahogany staircase and Tiffany chandler. :P

we had the exact opposite issue depending on the day. some days it would show roughly what it should be other times it was off 90k (again i know this because my wife is a realtor). its annoying because some buyers do think zillow is very accurate and they get upset when the realtor has to explain why its not.

I'm sure Realtors wish Zillow would just disappear. It's a worthless website that only creates problems for them.

from a purely "data" perspective yes.... but from a generating a conversation stand point.. its nice. Since unless your a realtor you don't get access to MLS.

I enjoyed looking at it because when we sold our house i was able to see what in our neighborhood was up for sale and i could see how we stacked up against the comp. for example some homes had dated kitchens and maybe a bigger backyard but ours was full of mature trees since we backed up to an old farmer hedge row. Thus, we were able to highlight some things that we knew other homes didnt have. its all a process and i HATE moving. Sold our home in Olathe... roughly 2400 sq ft without the basement which if finished would have added another 800 sq ft or so. were building in Dallas (moved for a great job opportunity) and getting almost double the sq ft (around 4300 total) and only paying 30k more than we sold our house for. its all about location and timing .... and gosh dangit i DO NOT want to have to move again. that was my second family relocation..that first was from Gardner, KS to Munich, Germany....sorry i digress.

Zillow is shady as ****. Their values fluctuate worse than bitcoin. When you list your house on there- all buyer calls get funneled to an agent that is paying them for advertising. Then the agent pushes them to their own listings.

If your new buyer is trying to get their loan through Prime Lending- don't accept it. They add all kinds of cost and even tried to make us pay for a second appraisal for the buyer's FHA loan on the property we just sold. On the back end- they added a bunch of ridiculous fees the day before closing. Crooks.

VA and FHA are the worst loans to deal with. Avoid them if at all possible.

Don't be afraid to hurt some feelings. We went with a "mom of a friend" realtor when we sold a few years back. We also felt her listing price recommendation seemed low, but we went with it because we just figured she knew better. It turns out that after we did some actual research, her and her co were known for underpricing to get high volume of sales. I figure we missed out on at least $10k, but it was our fault for not do the research up front.

Hmmm, good to know. We have already told her we want to go higher. She was fine with that. She knows we are willing to come down if it gets little to know interest or if feedback is that its priced too high.

Just a warning, doesn't matter what price you set it at. The buyers agent will always say it's too high.

Don't be afraid to stand your ground.

I can't stand the negotiations that inevitably take place... and yeah, it doesn't even matter if you stress that it's priced to sell.

I've had to haggle as little as ~3% of the cost to ease buyer's remorse if they didn't negotiate first... and not just moving money around to make the down payment or loan work or whatever... but actually having to discuss what amounts to like $15/month on a 30 year loan on a house that will probably be sold within 5-10 years.

Yay, I saved $5000! ....uh no, you probably saved $1200 over 7 years while narrowly escaping a fist through your throat*.




*you know, metaphorically

I had a mmillionire in the packaging business who was helping to buy a house for his daughter who got blown out of shape with a negotiation within 4 hours of closing clause. He told is daughter not to sign it, she told me to send it to their agent and later signed it, Dad appeared at closing, try his bullshit, "you have to sell so we will take about $5 discount and was promptly presented with a 15% increase in price and the deposit becoming non refundable if negotiations occurred at the closing table.

I gave him $5K discount and his daughter gave me a $22K void of contract settlement in return. He was happy saving his daughter $5K, she was happy getting what she wanted and I grinned for 15 straight at te dickhead without laughing. The Dad forgot telling me this at his his grand daughters BDay party 3 years earlier.

Having a renter who was eager to move into to my next house was my answer to negotiating.

This is not true. I have sold 3 properties on Zillow. I had them respond by email, and I had a sign in the front yard with my number and a flyer. Most who use Zillow drive by first and then get a flyer and serious buyers call you direct. I've sold the properties all in less than a month. Others disagree, but I used an appraisal and discounted 2-3% if they had no realtor. The appraisal cost between $350 and $450 and give immediate credibility to the price. Selling a property on your own is not very hard these days if you have an financial background and have an excellent handout that walks a buyer through the process with their lender. Lender's don't mind because they know the customer has more room for LTV.