Fischer: Trust the professionals when it comes to home appraisals
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Jen FischerNews flash: The appraisal process is not a perfect science. That being said, most of the time, it is very accurate. As such, the process of the real estate market analysis, done by an experienced Realtor is also not a perfect science. However, many times, we are using the same properties for comparisons as the appraiser — as a general rule, ideally, properties sold in the last 90 days or so, similar square footage, within a few years of age and same build type. Of course, location is paramount. The comparison homes should be within the same city or town, zip code and area. That is one reason why local knowledge is so important in the valuation process. Property values can change dramatically within just a few blocks. All of these factors are taken into consideration, including lot size, number of bedrooms, baths and if there have been any recent significant updates. A new bathroom mirror, for example, is really not enough to tip a scale one way or another. It is also important to note that while similar homes that are active and under contract are regarded, they do not have a final sale price listed and should not be given any significant weight. Sometimes it is easy to find these great comparisons and other times, it is more difficult. Either way, most of us spend a significant amount of time attempting to perfect the process, as close as possible, of valuing a property appropriately. Ultimately, what is someone willing to pay for it? And will the appraiser agree? The appraiser’s job is significant if a loan is to be taken out to secure the property since a lender is unwilling to lend anything above what the appraised value has determined the property is worth.
Recently, I was asked to determine a value on a property I was getting ready to list. Knowing this home was in a highly desirable area and had some truly salient qualities, I also knew that the condition would drive away a few potential buyers. All these things were taken into consideration when I was preparing a market analysis on the home. We are fortunate in the fact that we have some local appraisers that are true professionals and are happy to share information with us when asked as far as questions about how much weight a specific quality about a house in a certain area would be given. I was able to use this asset to determine the value of the subject property.
Once both me and the seller agreed on a value, we listed the property. We had a small range with which we could comfortably list and still be able to prove value. We decided to err on the side of the higher range and see what happened within the first few days.
Fortunately, due to the location, we were able to secure more than one offer after the first few days on the market. My clients chose the offer they felt most comfortable with, and we went under contract.
That evening I received a call from my client telling me, essentially, that we listed too low.
“Why do you feel that way?” I asked.
“Because we received multiple offers,” he responded.
“Is it possible we received multiple offers because it was priced right?” I asked.
He proceeded to then tell me that his contractor’s cousin’s brother (or something similar), had told him that he was giving the house away at that price. “Is he a licensed Realtor or appraiser?” I asked.
“No, but his cousin’s dad builds houses so he should know.”
I told him we would be happy to have him submit a strong back-up offer at the value he thinks it is worth. Of course, the response was crickets. Silence. No thanks. The truth is, none of the multiple offers we did receive were over ask price. That is because these offers were all submitted by licensed, reputable and experienced Realtors who have the same tools to pull comparisons for their clients as I do for mine. This isn’t 2020 anymore and our clients are not lining up to bring money to the table to pay over ask price for a property on top of increased interest rates.
Once you have secured a reputable professional in the business to help you sell your home, trust them. We really do know what we’re doing (as far as real estate anyway).
Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or jen@jen-fischer.com
