You want to price your home just right so that you’ll attract several buyers while at the same time extracting the maximum value for your home. To do this, you should request a pre-appraisal. An appraiser is going to have knowledge of your market area and will be able to access data, such as comparable sales of similar homes in your area, to determine how much your home is worth.
If you’ve decided to sell your home, then you need to know how much to list it for. You may have difficulty in deciding what price to ask for your home. If you price it too high, you’re going to lose buyers. If you price it too low, then you are going to miss out on thousands of dollars that should be going in your pocket when you sell. Most people don’t really know how much their home is worth and don’t know how much to ask for their home. You want to price your home just right so that you’ll attract several buyers while at the same time extracting the maximum value for your home. To do this, you should request a pre-appraisal. An appraiser is going to have knowledge of your market area and will be able to access data, such as comparable sales of similar homes in your area, to determine how much your home is worth.
Why Get a Pre-Appraisal Before Listing
One of the hardest tasks a seller must do is to price the home. As the seller, you’re emotionally attached to your home. As such, you may feel that your home is worth more than the market is willing to pay. So, if you choose to price your home based on your emotions only, you could be way off. Even if you try looking at market conditions, choosing the right asking price can be difficult especially if there are few comparables within the same market area. This is where a pre-appraisal can help. An appraiser will have access to comparables and other data that you may not be able to find. You want to price your home just right. If you price it too high, you’ll likely lose out on buyers. They will simply move to a more affordable option in your area. If you price your home too low, you will potentially lose thousands of dollars. The goal when determining the asking price for your home is to get as much value from your home as possible while at the same time attracting a large pool of buyers. To find the middle ground and avoid over or under pricing your home, it is best to get a pre-appraisal.
Most people who are contemplating the sale of their home are not up-to-date on current market conditions. Unless you follow the real estate market every day, you are not going to know how much homes that are similar to yours are selling for. A pre-appraisal is always a wise idea when selling a home. It will give the seller a good understanding of the market and where their home fits within that market. When the bank orders an appraisal of a property, the appraiser in that situation is the advocate for the lender and for the buyer. But, when you order a pre-appraisal, the information contained with that pre-appraisal is valuable and will work in the favor of you as the seller.
Buyers will try to negotiate the price of your home. This part of the home selling process is inevitable. But, if you have a pre-appraisal to show to the buyer, they may become more comfortable with your asking price and will have more confidence that your home is priced right. If you don’t have a pre-appraisal to show the buyer, then there’s more room for negotiating on the part of the buyer. But, if you have a pre-appraisal to fall back on, then the buyer can see that your asking price is based on a solid appraisal that reflects the price the market is willing to pay for homes similar to yours.
What Is a Pre-Appraisal
An appraiser will perform a pre-appraisal to provide you with an accurate value of your home. There are several factors that go into an appraiser’s determination of how much a home is worth. They will look at comparables in your market area that have some of the same features as your home. Comparables give a good indication of what similar homes in your market are selling for and the use of such comparables will defend the listing price you choose for your home.
The factors that an appraiser will look at include:
- Square footage of the home
- Condition of the property
- Lot size
- Market area
Most homes in a neighborhood are similar in value. An appraiser might put a higher value on your home if your home is a four bedroom that is located in a neighborhood with primarily three-bedroom homes. On your own, you likely wouldn’t know how much more valuable your four-bedroom home would be in your market. But, with an appraisal, you’ll know exactly where you stand and will be able to price the home accordingly.
What is the Process of a Pre-Appraisal
To get the pre-appraisal process started, you will need to contact an appraiser. They will work with you to set up a date to perform the pre-appraisal. The pre-appraisal will involve the following steps:
- You’ll need to find an appraiser. You can ask your real estate agent for referrals. You can also check online for appraisers in your area. You want to choose someone who lives in your area and has a solid understanding of current market conditions.
- The appraiser will collect comparable sales in your market area to compare to your home. They will choose homes with similar square footage, location and amenities.
- The appraiser will walk through your home and inspect the property. If they find any repairs that need to be made, you’ll want to take the time to make such repairs. Buyers are going to notice any repairs that need to be made and will take that opportunity to begin negotiating the selling price. Therefore, it is best to fix the repairs as they are found by the appraiser.
- You will receive the pre-appraisal report once the appraiser completes the report. You can show this report to prospective buyers to add credibility to the price for which you’re trying to sell your home.
How to Choose an Appraiser
Because you want to order a pre-appraisal to ensure you’re getting the best value for your home, it is necessary to choose the right appraiser for the job. Because there are so many factors that make up the appraisal of your home, you’re going to want an experienced appraiser. An appraiser is not an inspector, but they will need to know the general condition of your property and have a solid understanding of your market area. Knowing where to turn when looking for a reputable appraiser can be difficult because this is likely something you’ve never had to deal with before. To find the best appraiser to value your home, take into consideration the following tips:
- Certain appraisers specialize in certain types of appraisals. Therefore, you want to choose someone who specializes in residential appraisals. You wouldn’t choose an appraiser whose specialty is appraising multi-family dwellings.
- Ask your real estate agent for the names of some appraisers in your area. Real estate agents work closely with appraisers and will be able to refer you to the most reputable appraisers in your area.
- Don’t go with the first appraiser you meet. You’ll want to interview several. The goal will be to choose an appraiser with whom you’re comfortable. You can determine which appraiser has the most experience and who you think will be the best for the task at hand. It is important to talk with each appraiser about their licenses, certifications, training and prices.
- When you finally choose an appraiser, you’ll need to confirm their licensure and certification. You can do this by searching the Appraisal Subcommittee’s National Registry. This is an important step in deciding which appraiser you want to work with because their services can mean the difference between you losing or making thousands of dollars.
How Can a Real Estate Agent Help
Your real estate agent can help you through the pre-appraisal process. First, your agent can refer you to a reputable appraiser. Real estate agents work with appraisers on a regular basis. Your real estate agent can tell you what to look for in an appraiser, such as what type of licensure, certifications and training an experienced appraiser should have. Your home is an important investment. You don’t want to hire just any appraiser because the difference between a good and bad appraisal could mean thousands of dollars when it comes to pricing your home. Your real estate agent is a great resource when trying to find a competent appraiser to value your home.
When the appraiser walks through your home and makes an assessment, it is your hope that your home is going to appraise on the high side. There is a better chance of this happening if you listen to your real estate agent. Your real estate agent sees several different homes on a regular basis and they have a good eye for making small adjustments that add to the value of your home. A good agent will walk through your home and take note of any small repairs that may need to be made. You may not think you need to worry about making repairs until your home goes on the market and you start talking to buyers. However, you must remember that the appraiser is going to take note of everything they see, including small repairs that need to be made. These small items may not seem like a big deal, but they add up and can decrease the value of your home. It’s best to make any necessary repairs before the appraisal so your home doesn’t get any strikes for these annoying repairs.
A real estate agent will also help you stage the home for the appraisal. It is amazing just how much of an effect rearranging a room can have on the overall look of the room. Just removing one piece of unnecessary furniture can open the entire room. This is what you want because a home that appears to have more space will be more valuable than a home that is cluttered with too much furniture and other items. Buyers are on the lookout for homes that have larger rooms and that’s how you want your home to appear. You might not think that a home with crowded rooms would appraise for less than the same house that is nearly empty. However, that is just what could happen. You need to stage your home as if you’re selling it. When you decide to sell your home, there’s going to be a lot to do. So, take your real estate agent’s advice and start rearranging your home before the appraisal and when it comes time to start showing buyers your home, it will already be staged. This will take away some of the stress you feel when getting your home ready to go on the market. Remember, your primary goal with an appraisal is to show your home is worth what you’re asking. Your real estate agent can make suggestions on rearranging furniture and clearing clutter that can really add value.
Selling a home is stressful enough without wondering if you made the right call when it comes to pricing your home. You do need to keep in mind that no matter what your listing price is, almost every buyer you come across will try to negotiate the listing price down as far as they can. In rare instances, a seller will get the price that they’ve listed the home for. But, this is rare. You need to price your home so that there’s a little room for negotiation. Price your home slightly higher than what you expect to sell it for. This will reduce the chance that you’ll lose money. But, the pricing should be such that you will still attract several buyers. If you keep in mind that the goal when selling your home is to maximize your profit on the sale, then you’ll be successful.