Real Estate Q&A with Dave Kimbrough
We are interested in selling our home and a friend of mine said that I should get an appraisal before I talk to a real estate agent, so I know the value of the my home before they come out. I have always had the agent I worked with help me determine the value of my home. Should I also get an appraisal? Any thoughts are appreciated.
Joe and Katie, Fruita
Joe and Katie,
Your friend holds a common belief, get an appraisal to determine the value of your home, but I do not think it is necessary. Personally, I think of it as quite benign, neither a good or bad idea in most circumstances. If a home owner has an appraisal performed before I get there, I consider the value, but by no means does it determine my opinion of value. You are correct in assuming the real estate agents you have over will help you determine a listing and sales price for your home. They will pull similar sold properties and similar active properties to help you determine where you might want to start the process of selling your home.
My professional opinion, from a sales perspective, is that an appraiser is there to help decipher if a price agreed up on by a willing and able buyer and a willing and able seller is within a justifiable price range. They are there, in the world of sales contracts, to help the lender decide if the price agreed upon is a justifiable price for any given property and can be backed up by other similar sales. To do this they use comparable sales similar to what your real estate agents use, but it is likely an appraiser is looking through a different lense than your agent.
I look at the sale price not only through the lense of what is justifiable to get the loan through appraisal and underwriting, but also what a buyer is likely willing to pay for the property? What a buyer is willing to pay in a fair and open market may differ, up or down, from what value an appraiser puts on a property. Remember, checks and balances. An appraiser is there to help determine if the agreed upon price can be justified, not necessarily to determine for a seller what a buyer will pay you for your property. I hope that makes sense.
I will offer an exception to my thoughts above and that is if the property has one or more very unique characteristics that may significantly influence the value of the property. Occasionally, I run across properties that are very unique and finding comparable sold properties is very difficult and it is very helpful to see how an appraiser may view the property and find comparable sales that will help us establish a value.