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I have addressed this already. Tax, divorce and estate are lawyer things and outside of what we do as real estate agents. As far as determining value to sell I stick by what I say. Market analysis is free and appraisal costs a lot of money. If you would rather buy something you don't need to, have at it. I can't in good conscience advise a client that it would be necessary.
Agreed. I think I've only twice recommended to a seller client to get an appraisal and both of those were very unique properties that there weren't comps for. I wanted to see where they came in.
If you need an appraiser, call and ask about his experience in the area and with your particular type of property. Also, ask about the process of arriving at a value and how long it will take. You want to get an appraiser who will talk to you, explain the process, and will be willing to discuss the results after the appraisal has been completed. DO NOT choose based solely on price, a couple $100 either way is insignificant compared to the $1,000s of difference it could make.
I would also add a caution to this: Simply calling appraisers off of a Yelp! or Google search is probably a haphazard way to go about it. Ask several real estate agents in your area what appraisers they respect -- we all have the names of at least two or three appraisers who consistently do good work. And we also have a couple that we try to avoid at all costs. I may not be able to choose an appraiser to evaluate a house, but I sure can request an alternate if I interview the appraiser when they call for an appointment and discover that they have never done an appraisal in that area, their area of expertise is 20 miles away (large metro area), and/or they have no experience with a specific type of property (i.e., historic, contemporary, aviation community, etc.)
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Originally Posted by thebigW
The main difference between an appraisal and a CMA is the type of value being conveyed. A CMA typically is looking at "highest possible", while an appraisal is looking for "most probable". If you have specific needs, like sell within 30 days, then you would need to advise both agent and appraiser to adjust the type of value being estimated. Each circumstance is different and requires different logic and analysis.
Not sure I agree with this. A good CMA will point at the price that the house is most likely to sell for, based on recent sales in the area. A real estate agent with a good knowledge of the area and of other homes recently sold will be able to say, "Yeah, this one was the same floorplan, but had a finished basement," or "This one was a little smaller, but the finishes have all been updated" or "This one has 30-year-old carpet and Formica counters, compared to a home with 100% hardwood floors and granite," and know how much value a buyer will probably attribute to those differences. And usually, you end up with a range -- trying to narrow the range is the art. I don't think you can point at a CMA and say "this is the highest price this house will go for", which is implied by your comment.
It's often a moving target, especially in a fast-selling market. An appraiser will be basing their value on property in the area that has sold in the last six-twelve months. But, if the market has shifted, and suddenly homes in a desirable area are getting multiple offers surrounding a higher price, the appraisal may not be able to keep up with the current value. In that case, I make a point of meeting the appraiser when they come to look at the house, and bring copies of the offers we received to document demand. Five offers for 5% over list price, and 8-10% higher than 1 year old comps is pretty powerful.
I'm concerned because the women that sold me the house built it at $201 a square ft in 2006. It has features no other homes has in the neighborhood. It is one of the only one story house in a mixed retirement and family village. She is even concerned about the price now because, since 2006, the basement which is almost the length of the house is completely finished with a finished bathroom and back up a pump.The whole kitchen updated, exterior painted etc. but the MA is saying I may get back the same price it was built at in 2006 even though it has been updated with $40k of upgrades plus appreciation.
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Well, the difference between 2006 and 2009 was night and day, wasn't it? Values nosedived during the crash, and in some areas they recovered faster than other. The cost of the upgrades is almost a null value -- what someone paid for upgrades, and what value a buyer will attribute to them are two very different things. There are very few updates/renovations that get a 100% return on the investment. There's a balance between "over-improving for the neighborhood" and "making your house your own". Can you imagine what the value might be if the updates hadn't been done?
Can I get an appraisal and provide it to the buyers for their bank?
The reason I would do that is to know beforehand what is a fair, accurate listing price based on an MA and appraisal?
You could get an appraisal, but the bank will not accept it as part of the mortgage approval process. If, for some reason, there was a dispute on the value that the bank's appraiser provided, it would be a good reason for disputing the value (assuming not too much time had passed between the two appraisals). But no bank is going to accept your appraisal.
I had a 3rd MA from another realtor that priced it 20k higher than the other MA's. Since the house is unique, either I price it in the median of the 3 MA's or get an appraisal.
1. what's the range of values they've given you?
2. how many different comps are they using? In theory, they should all be using the same 3-7 homes, and perhaps exhibiting market knowledge by telling you the actual differences (have been in the comps). perhaps one or more of them have a comp the others don't, and can explain to you why.
1. what's the range of values they've given you?
2. how many different comps are they using? In theory, they should all be using the same 3-7 homes, and perhaps exhibiting market knowledge by telling you the actual differences (have been in the comps). perhaps one or more of them have a comp the others don't, and can explain to you why.
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Originally Posted by Diana Holbrook
You could just average them, but I would look instead at the rationale and comps they use, it might point to one of them being more accurate.
I'm with these guys. Take a hard look at the three reports you received to determine if one is more/less accurate than the others.
Whether to get an appraisal or a CMA depends on why you want it and what type of property you have.
If you want to sell, and have a home that is similar to others in the area, then a CMA from a good agent would probably be best. You should get a CMA from 2 or 3 agents that you have interviewed. You can review them and determine which one makes more sense. Don't just rely on the highest value. A good agent can thoroughly explain your market and the reasoning for the value. DO NOT choose an agent based only on the highest CMA value.
If you need a value for legal reasons, probate, tax, divorce, etc., an appraisal may be required.
If you have a truly unique home and/or you get a wide range of values from agents, then an appraisal would be a good idea. If you are selling, you will need to get an idea of what your buyer's appraisal will look like. With a CMA and an appraisal you can make better decisions on setting price and choosing which offer to accept. If an appraisal is lower than the price where you are getting offers, then make sure the buyer has extra cash and a willingness to go over appraised value. If you are listing for less than appraised value, then it makes for a great marketing tool.
Make sure you call a few agents and/or appraisers.
If you need an appraiser, call and ask about his experience in the area and with your particular type of property. Also, ask about the process of arriving at a value and how long it will take. You want to get an appraiser who will talk to you, explain the process, and will be willing to discuss the results after the appraisal has been completed. DO NOT choose based solely on price, a couple $100 either way is insignificant compared to the $1,000s of difference it could make.
The main difference between an appraisal and a CMA is the type of value being conveyed. A CMA typically is looking at "highest possible", while an appraisal is looking for "most probable". If you have specific needs, like sell within 30 days, then you would need to advise both agent and appraiser to adjust the type of value being estimated. Each circumstance is different and requires different logic and analysis.
Very well explained. Can a buyer also get a CMA from2 - 3 agent's ? Say I find a house online which I like, can I ask 2 - 3 agents for a CMA to see what offer price / final purchase price they suggest for that 1 property and then hire the buyer's agent according to what they have to say about the house & price ?
Very well explained. Can a buyer also get a CMA from2 - 3 agent's ? Say I find a house online which I like, can I ask 2 - 3 agents for a CMA to see what offer price / final purchase price they suggest for that 1 property and then hire the buyer's agent according to what they have to say about the house & price ?
You CAN ASK that... It's very fair though to ask a prospective agent about a house you are considering, and see what they will say about the property from what they can see online... Discuss it's features, and anything else they might know about it from personal experience or the agent only remarks in the listing...but... please understand that doing an accurate and thorough CMA takes time and considerable research, up to and including going out to SEE the property in person, and researching many prospective comps to find the best ones to use with this property.
Many good agents aren't going to have that kind of free time to invest in a buyer who they haven't met, who hasn't even seen the home yet. CMAs are often a free service to prospective clients, but that doesn't mean they are freely given away unless an agent has a LOT of free time. Asking for a complete CMA is more common when trying to determine fair price on a home you have seen and want to make an offer on... not for every home you are interested in seeing. My two cents.
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