Today we’d like to continue with the series we began several weeks ago on stress-free home selling. So far, we have covered pre-listing home inspections and home staging and the ways they reduce your stress when selling your home. This post will focus on home appraisals.
There are many ideas and terms thrown around when people discuss real estate, and it’s hard to know what’s accurate. Appraisal, sales price, broker’s price opinion, and market price, are just a few of the terms you hear when people discuss pricing a home to sell. We’ll begin by defining exactly what an appraisal is and then how an appraisal will help reduce the stress in the home selling process.
What is an appraisal?
An appraisal is a determination of a home’s value. Appraisals are completed by licensed, professional real estate appraisers using comparable data from the real estate market. Appraisers view the subject property and compare it to homes that have sold in the recent past – these homes are called comparables or comps. Value is determined by comparing the subject home to the comps by looking at things such as square footage, age, location, condition – all the way to garage space, kitchen upgrades, and more.
How does an appraisal benefit me – the seller?
Neutral opinion of value. Hiring an appraiser to give you a home value allows you to obtain an objective, third-party opinion of the the value of your home. It’s often difficult for individuals to look at their home objectively due to the emotional ties to their home. This is completely normal and understandable, but can sometimes cloud a seller’s judgment when they are trying to personally consider what the value of the home is. The value to the home seller may vary from the value a potential buyer sees. Realtors can also have clouded judgment when determining property values based on their past experiences or desire to obtain the listing. An appraiser has no ties to your home or the real estate transaction so they are able to look at things most objectively to determine a value based on facts and data.
Establish a benchmark price. Appraised value and market value are two separate things. The appraised value is the value the appraiser gives you, while the market value is the value established by the current real estate market. Depending on competition, number of available buyers, interest rates, and other market variables, the actual price your home will sell for may vary from the appraised value. Market price could be higher or lower than the appraised value. An appraisal is a benchmark price. Once you have the benchmark price, you can, coupled with your real estate agent, determine where the market value will fall to set your list price.
Save time and money. When you have the advantage of an appraisal to help establish your list price, you are able to enter the market at a more desirable price. This allows you to generate interest quickly – thereby selling the home quickly. Not only does this shorten your time on the market, it can also save you money. Typically early interest and offers mean top dollar for the home – which is more money in your pocket.
Whether selling a condo, townhouse, or single-family home, from Penn Manor to Hempfield, Manheim Township to Warwick, getting an appraisal prior to listing your home can significantly reduce the stress you experience throughout the home selling process.