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We aren't sure if we're going to sell now or not, but while at a couple of open houses we've met RE brokers. One came over last week and gave us an appraisal of our house, and another will be here tomorrow evening. The first knows the area better, the second ... well, I can't fully say until I see what she has.
I wonder how biased the appraisal by an agent is. As the 2nd woman said, the first gave us a low price because she wanted it to sell quickly. If the second gives us a higher range, it's easy to assume the reverse: she wants us to have high hopes and hire her.
Do others hire professional appraisers for a non-biased price range? If so, who and how do I find a trustworthy person?
We aren't sure if we're going to sell now or not, but while at a couple of open houses we've met RE brokers. One came over last week and gave us an appraisal of our house, and another will be here tomorrow evening. The first knows the area better, the second ... well, I can't fully say until I see what she has.
I wonder how biased the appraisal by an agent is. As the 2nd woman said, the first gave us a low price because she wanted it to sell quickly. If the second gives us a higher range, it's easy to assume the reverse: she wants us to have high hopes and hire her.
Do others hire professional appraisers for a non-biased price range? If so, who and how do I find a trustworthy person?
Thank you
Jen
Jen,
Someday, we may decide to move, so I am always trying to figure out the exact asking price for our house and what we would really get for it.
True, it helps to get an appraisal, but I would like to suggest these ideas:
1) I take a look at the advertised sold vs asking price of local realtors. Here, in New York (we live in a city-suburb), there are some long time realtors who have posted, on their websites, the asking and then the sold prices on houses. One realtor (I would pick her as I think she is smart, met her and she works quickly but honestly) claims that her houses are sold at an amazing 98.5% of the asking price. But, you can check to see if it is true, and my checking shows that it is. It is also true of another lady that she gets about 95-96% of the asking price.
2)Then, I have taken a careful look on the Net of the houses these ladies are selling, the asking price, etc. and then I even do a sidewalk appraisal. I look at houses in my neighborhood.
I think that I have a very good idea of what our house would truly sell for, and how close we should set the price.
You need to be aware of the difference between an "Appraisal" prepared by an appraisor, and a "Comparative Market Analysis" prepared by a real estate agent.
An appraisor will prepare an appraisal based upon recent sales (last six months) of similar homes within 1/2 mile of your property. They will make adjustments for things such as number of bedrooms and baths, existance of garage, size of yard, etc. Although this sounds very scientific, it does not take into effect other factors, such as homes on the market (your competition), homes that did not sell (because they were overpriced), projections of where the market is moving, and your desired time frame for moving.
A real estate agent will prepare a Comparative Market Analyis which takes these factors into account.
Beware of real estate agents who inflate the value of your home in order to get you to list with them. Make sure that what they are telling you "makes sense". My advice is to pick your real estate agent without any regard to the value (or what they say is the value) of your home. Make sure that the person who you select has the skills and the energy to promote your home activly. Ask for proof of their track record. Hire a full time agent who supports his or her family by selling real estate, not a part-timer or a friend who sells one or two homes a year. It is a big decision, as you are placing your biggest financial asset in this person's hands.
You need to be aware of the difference between an "Appraisal" prepared by an appraisor, and a "Comparative Market Analysis" prepared by a real estate agent.
An appraisor will prepare an appraisal based upon recent sales (last six months) of similar homes within 1/2 mile of your property. They will make adjustments for things such as number of bedrooms and baths, existance of garage, size of yard, etc. Although this sounds very scientific, it does not take into effect other factors, such as homes on the market (your competition), homes that did not sell (because they were overpriced), projections of where the market is moving, and your desired time frame for moving.
A real estate agent will prepare a Comparative Market Analyis which takes these factors into account.
I'm not sure I understand your last sentence. You wrote what an appraiser does then said that a RE agent will take those factors into account. Is the difference that an appraisal takes into account market projections? What I received from the real estate agent sounds a lot like what you described. I've got info on properties for sale, properties that have sold, their initial asking prices, and their addresses. I don't have info on properties for sale that have not sold. The rest of what you wrote seems to be covered. Actually, I think what she gave me is a pretty good analysis. But an enormous decline from what we paid in 2005 - about 20% at least.
I beleive an appraiser is objestive because they are getting paid by you and have nothing to gain by determining the value. They maybe a tad on the conservatives side, due to the banks these days.
Pick an agent with a good track record and you get along with.
If you are in the ball park, the market will determine the price. There are still bidding wars going on although not as crazy as before.
Also, are you in a rush or not? That should play a major part in the price. Do you have a timetable or can you wait a depressed market out? Do just want to see what you can get or you need a bigger house? Good luck!
Appraisors can be overly objective if your goal is to establish a market value at which your home will sell. They rely on the physical factors such as square footage much more then a typical home buyer does. A good agent can certainly help you establish a realistic number at which a house will sell. It sounds like your real estate agent did a good job. You may want to bring in a couple of others just to verify that she is in the ballpark. But, remember my previous advice: do not pick your agent based upon what they tell you the home is worth.
Thank you for your replies. Just to add, the first agent also told us how long the homes were on the market before they sold. But, no, we'd definitely not choose someone based on a price they tell us.
Quote:
Also, are you in a rush or not? That should play a major part in the price. Do you have a timetable or can you wait a depressed market out? Do just want to see what you can get or you need a bigger house?
We aren't in a financial rush, in that we need to sell our house. We are anxious and don't know what to do. We're actually having a very hard time with this. Right now we could lose up to $100,000 if we sell. We have a son who will be two this summer, so will be starting kindergarten in three years, and we don't want to send him to our district elementary school. We figure prices will come down more before they go up and don't want to lose even more. So part of us is saying, let's just walk away with some money. Another part of us is saying, we've got a great house in an up-and-coming area - wait. I guess it's 1. When will the market pick up? 2. Where do we want to live? 3. Where do we want him to be in school? These are huge things for us, and our money is "finite."
Based on what you both wrote, and common sense, I would want to have an appraiser appraise it as well. I can see fairly well that we're going to lose -- the surrounding roads are so similar to our own -- but without seeing the inside of others' houses I can't know for sure how much, or precisely how accurate the info we were given was.
I'm curious, back when we bought in 2005, how accurate would you say a bank appraisal was? Our own lender appraised the house $10,000 less than we paid. (We also did some upgrading after -- added a room, CAC, etc)
I'm curious, back when we bought in 2005, how accurate would you say a bank appraisal was? Our own lender appraised the house $10,000 less than we paid.
It was probably pretty accurate. But keep in mind that it is not an exact science. Also, appraisals for purposes of mortgage loans often come in at very close (or exactly) the amount of the purchase price. Odd, isn't it?
You need to be aware of the difference between an "Appraisal" prepared by an appraisor, and a "Comparative Market Analysis" prepared by a real estate agent.
An appraisor will prepare an appraisal based upon recent sales (last six months) of similar homes within 1/2 mile of your property. They will make adjustments for things such as number of bedrooms and baths, existance of garage, size of yard, etc. Although this sounds very scientific, it does not take into effect other factors, such as homes on the market (your competition), homes that did not sell (because they were overpriced), projections of where the market is moving, and your desired time frame for moving.
A real estate agent will prepare a Comparative Market Analyis which takes these factors into account.
Beware of real estate agents who inflate the value of your home in order to get you to list with them. Make sure that what they are telling you "makes sense". My advice is to pick your real estate agent without any regard to the value (or what they say is the value) of your home. Make sure that the person who you select has the skills and the energy to promote your home activly. Ask for proof of their track record. Hire a full time agent who supports his or her family by selling real estate, not a part-timer or a friend who sells one or two homes a year. It is a big decision, as you are placing your biggest financial asset in this person's hands.
Good post. Also, I would be aware (and this sounds counterintuitive) of RE agents that try to low-ball the price with hopes of a quick sell. We were selling our house in Queens in 2006, good market, and called a few Korean agents (the area is turning big time) to see what they can do. They all want 3% commission, which is good, but they all low-balled the house. They were telling me it could not sell for more than $830K or there abouts. I sold it on my own in the Korea Times, so no commission, for $900K, in 3 weeks. From their perspective, a commission of $27K (3% of 900K) vs. $24,900 (3% of $830) is not that big a deal, but low balling the price would hav ensured a quick and more easy sell. Some seem to be more about volume than getting top dollar. Just be aware.
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