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That is what I have done with 2 of the houses that I sold myself. Both sold the week they went on the market.
The one where I let the realtor tell me what to price it at sat for 4 months.
That's quite surprising. I'm not sure why everyone thinks a real estate agent has some kind of motivation to price a house too high. A house has to be priced right to sell. No sale = no commission. It sounds more like you didn't do a great job hiring a real estate agent. In the end, which agent is hired and what price the house is listed at is 100% the seller's decision. People like to point the finger at the agent which is fine and it certainly sounds like you hired a crappy agent, but you also need to take a look in the mirror because you're the one who hired them.
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Originally Posted by pierced
We had an appraisal done on the house we are about to sell. Good thing too. 2 different realtors wanted to list it at 20k above the appraised value.
Depending on the price point of your home, this might not be an unreasonable mark up. Keep in mind, the price is a solicitation of an offer. It doesn't have to be (and almost always never is) the same amount as the home's value.
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Originally Posted by staywarm2
Although our house is larger than some others in my subdivision of 200+ homes, I feel like some of the other homes have more updates than we do. Although we are real estate savvy in general, we are having a problem deciding what a 3rd bath upstairs would be worth, what a sunroom is worth, and what a fancy finished basement or a 3 car garage would be worth (some we have and some we don't) in a 20+ year old home.
It's hard for us to compare our house to the other homes, as far as asking price. Is this something my (new) realtor should be able to do? Our first realtor gave us bad advice and the house was priced way too high. We don't want to do that again in the spring.
Absolutely, your agent should be able to present you with data indicating where your house should be priced. If the agent advises you to stray from the data, they should provide you with good reasoning for doing so (ex. "these comps are two months old and the RE values in our town have increased 10% in that time").
There are plenty of mediocre and some bad agents out there. If you can find a good one, they'll be worth their weight in gold. Sometimes in life you have to kiss a few frogs before you find a prince as they say. Just because you give someone a kiss though doesn't mean you have to get in bed with (a/k/a hire) them though.
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Originally Posted by Listener2307
......and if you really want the house to sell, get a home inspection, too. A buyer presented with a recent home inspection and appraisal will have very few reasons to get nervous.
And the seller (you) will have a strong position when it comes time to negotiate.
I disagree. I'm not a believer in the pre-listing home inspection. I've stated my case numerous times on this forum and I'm not going to get into it again, but I disagree.
Getting an appraisal can be helpful in a few ways.
1. You will be getting an unbiased opinion. The appraiser gets paid the same regardless of the value.
2. You will get an idea of what value would possibly be approved for financing.
3. You can potentially use it to negotiate an offer.
The appraisal can't come back on you later, unless you show it to someone. The appraisal is not recorded anywhere and is confidential information. You are the only one who can disclose the contents.
If you are looking for an appraiser, call a few and talk to them first. An appraiser should take the time to explain the basics to you and his/her experience with your type of property and location. DON'T shop by price. Find one willing to talk to you and answer your questions.
Good luck with selling your home.
Very good advice, but I was wondering about disclosure laws. If you have a formal appraisal, is there the chance it must be disclosed or is it definitely confidential?
Depending on the price point of your home, this might not be an unreasonable mark up. Keep in mind, the price is a solicitation of an offer. It doesn't have to be (and almost always never is) the same amount as the home's value.
In regards to 2 different realtors wanting to list my home for >20k than it appraised for? All that would get me is having my house sit with no showings until the priced dropped. No thanks. That is exactly what the realtor that you tell me to look in the mirror because I hired did. I argued that the market would not bear the price, she argued that she was the expert, when I asked for the price to be dropped she waved the signed contract in my face. I finally fired her after a big pain in the a$$ fight.
My market is not super hot, so houses are not being gobbled up the minute they come on the market. I want to list my house and get a quick sale. And I wanted to be realistic in terms of what I could expect to make.
I also recently lost a big chunk of $$ on a house that came up on the comps as within the asking price because they went outside the neighborhood. The appraisal came in 20K low. Bank dropped the loan and I was out the inspection fee, the bug inspection, the survey, the due diligence and the appraisal. >1200.00
The house I am about to put on the market is in a resort/retirement rural area, passive solar, revenue-generating grid-tie solar, on acreage and is hence a specialty property. The real estate agents I have talked to all say that appraisals are a HUGE problem out here. There have been several foreclosure sales that have been coming in well under the - very slow - market values, which have depressed prices. Plus the available appraisers vary widely. One of my neighbors had their house appraised as part of an effort to fight the assessed tax valuation, and one appraisal came in at $390,000 and the other at $310,000. That is a huge variation and makes it hard to properly price a house.
Very good advice, but I was wondering about disclosure laws. If you have a formal appraisal, is there the chance it must be disclosed or is it definitely confidential?
Definitely confidential.
No one would even know that you had an appraisal unless you told them, much less any appraised value.
I don't know if an pre-sell appraisal will do any good as seem like the opinion vary from one appraiser to another. It seem to me that a purchase, refi or HEL appraisal are different and it puzzled me. Appraisal also does not take into location premium as a factor. For example, if you live close to downtown with a train station vs similar house 2 miles away.
There are good and bad appraisers, and appraisals from among the better appraisers should be in the same range as each other. I do a lot of relocation work and the clients expect the two or three appraisals to be within 5% of each other. Same with the sales prices. Over the period of a year, I can keep the average variance right around 5% based upon tens of millions of dollars worth of appraised properties.
Anyway, you need to do the work upfront by finding a good appraiser and they won't be the cheapest. Your statement about an appraisal not taking location into account is ridiculous. It's one of the main value influencing factors.
Appraisals for different intended uses can be different based upon what is called the scope of work. Lenders have various standards that oftentimes forces the appraiser to choose comparables based upon Fannie guidelines- and those comparables may not otherwise be the best choices.
If you hire your own appraiser for selling purposes then the appraiser has fewer restrictions on comparable sale selection and should be able to assist you with pricing. You could even order a relocation type appraisal where the appraiser estimates an anticipated sales price at some point in the future. Those are pretty expensive however.
One significant difference between an appraiser and real estate broker is that the appraiser isn't trying to list your house. In my area, 'buying a listing' by promising a seller that their house is worth more than it really is, is a major problem. The broker simply anticipates eventually being able to convince the seller to lower their list price at some point in the future.
Up until last year, the average original list price to sales price ratio in my market was 85%. That meant, that on average, brokers were off by that much on their original pricing. And imagine the poor sellers whose brokers were even farther off than that.
There are good and bad appraisers, and appraisals from among the better appraisers should be in the same range as each other. I do a lot of relocation work and the clients expect the two or three appraisals to be within 5% of each other. Same with the sales prices. Over the period of a year, I can keep the average variance right around 5% based upon tens of millions of dollars worth of appraised properties.
Anyway, you need to do the work upfront by finding a good appraiser and they won't be the cheapest. Your statement about an appraisal not taking location into account is ridiculous. It's one of the main value influencing factors.
Appraisals for different intended uses can be different based upon what is called the scope of work. Lenders have various standards that oftentimes forces the appraiser to choose comparables based upon Fannie guidelines- and those comparables may not otherwise be the best choices.
If you hire your own appraiser for selling purposes then the appraiser has fewer restrictions on comparable sale selection and should be able to assist you with pricing. You could even order a relocation type appraisal where the appraiser estimates an anticipated sales price at some point in the future. Those are pretty expensive however.
One significant difference between an appraiser and real estate broker is that the appraiser isn't trying to list your house. In my area, 'buying a listing' by promising a seller that their house is worth more than it really is, is a major problem. The broker simply anticipates eventually being able to convince the seller to lower their list price at some point in the future.
Up until last year, the average original list price to sales price ratio in my market was 85%. That meant, that on average, brokers were off by that much on their original pricing. And imagine the poor sellers whose brokers were even farther off than that.
In our very large metro area, the appraisal process changes have dictated that appraisers are chosen at random and they may not even be familiar with our suburban city, much less our individual subdivision (which is prized for its swim/tennis and for our good schools). So there has been much discussion about appraisers being unaware of certain points about an area, and subsequently appraising a home on the low side. Of course, if I'm hiring the appraiser instead of the bank, I can select one who is indeed knowledgeable about our area.
Interestingly enough, if an appraiser is incompetent and not familiar with an area then you'd expect that they would over value properties as often as they would under value them.
The issue of appraisers coming from way outside the area of the subject property is indeed a problem, but not as significant of a problem as NAR would have you believe.
Dodd-Frank required lenders to have the appraisal ordering process be separate from loan production. Far too many lenders took that too far and ended up outsourcing their appraisal process to appraisal management companies. However, there are still enough local lenders out there who kept the process in house, yet separate. Real estate brokers need to send their business to those types of lenders.
The reason that the AMCs are so successful is that real estate brokers continue to provide business to lenders who use AMCs. It's ironic that the NAR complains about bad appraisers, but then fails to encourage their members to not continue to support those lenders who are making the choices to hire out-of-area appraisers.
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Location Affecting Appraisal
