Setting the correct price for your home is one of the most important steps to selling a house. If a price is placed too high, your home could be sitting on the market for months without receiving a buyer forcing you to cut the price down. If your home is priced too low, then you may be leaving money on the table when you accept an offer. Although many home sellers opt to go through the appraisal process themselves without professional assistance, in a tough market, it helps to have an appraiser on your side to give you an unbiased opinion.
Here are a few reasons that a professional appraisal may be a good idea, and tips on how an appraisal report is used when selling:
Why Get An Appraisal?
If you are selling your home, it is true that you can price your home yourself without the help of an appraiser or the advice of a real estate agent. However, many sellers who decide to sell their home have personal feelings towards their residence that can make an impact on their pricing decision. For example, it is easy to think that you can make a larger profit by simply increasing the price of your home, or you may think that your home is more valuable than its actual worth. Either way, this may result in overpricing your home, which means fewer buyers will be willing to consider your property.
A professional appraiser can give you an unbiased opinion based on market value of the property which can help you price your home right the first time instead of doing it down the road after you have tried for months to sell it at the higher price. An appraiser can give you an analysis by checking comparable home sales in the area, the pros and cons of your specific neighborhood, and the structure itself. The final report can be anywhere from 3 pages to a hundred, or more, pages depending on how detailed the appraiser is, and you can typically hire an appraiser for a couple hundred dollars. This price might seem high but it is well worth it especially if you are unfamiliar with how to price a home or how to do a market analysis.
What’s In The Report?
An appraisal report should not be confused with a home inspection report although both may have similar sections and details. A home inspection report provides a detailed inventory of structural and functional issues in your home, so that you can address them or have them reported during the course of the sale. An appraisal report will show many of these same structural and functional problems because they affect price. In fact, the appraisal report will provide a detailed report of all the things that were considered in pricing your home and may also conclude how long it may take to sell in its current condition. For example, an appraisal will show the number of bedrooms and bathrooms the house includes, its square footage, the condition of the home’s interior and exterior with an eye for repairs, and then it will compare all of this to comparable homes that are being sold within the neighborhood. They will also compare the attractiveness of the neighborhood itself including its proximity to schools, whether these schools are considered favorable, the distance the home is from amenities, and how many homes are being sold currently, including foreclosures and short sales. From all of this, you will be able to tell how well your home stacks up to the neighborhood competition, and what improvements you may wish to make to increase your chances of a fast home sale.
Look at Your Buyer’s Paperwork
You may have forgotten, but you have probably done an appraisal on this house already when you were making the purchase. Many lenders require you to have the home appraised before a mortgage is secured, and often a lender will have this on record by law. If you have the paperwork, you already have a good start in correctly pricing your home.