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

[Lzen]

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.

[Lzen]

Originally Posted by Kiimosabi

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.

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.

[Kiimo]

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.

[Lzen]

Originally Posted by DJJasonp

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.

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.

[scho63]

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.

[xbarretx]

Originally Posted by IowaHawkeyeChief

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.

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

[scho63]

Most important question: What is your goal?

[DJJasonp]

Originally Posted by scho63

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 your 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.

Summed it up quite nicely/accurately.

[Shag]

Originally Posted by Lzen

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.

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.

[xbarretx]

Originally Posted by DJJasonp

Summed it up quite nicely/accurately.

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.

[ptlyon]

Originally Posted by scho63

Most important question: What is your goal?

Hey hole!

[Lzen]

Originally Posted by scho63

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.

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.

[xbarretx]

Originally Posted by Shag

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.

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!

[Kiimo]

Originally Posted by Shag

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.

"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.

[Lzen]

Originally Posted by Shag

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.

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.

[King_Chief_Fan]

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.