Do I Need An Appraisal?
Updated: Feb 25, 2019
Yes, you do! If you are selling your house, you want to have in hand a reasonable idea of what homes similar to yours, in your immediate area are selling for before you talk to a realtor. It is a realtors job to help you sell your home . Having a good idea of where it should be listed will be helpful to both of you. You do not want to list your home for significantly more than others of similar style, size and condition in your neighborhood. Faulty pricing can lead to:
-- longer time on the market,
-- fewer offers,
-- offers that will require contracted price negotiations,
-- seller concessions
-- and the risk that a buyer will need to bring cash to the closing table when the appraisal opinion of value does not support the sales price.
If you list it for below market values, you of course will miss out on the additional value already accrued in your home.
An appraisal will provide a range of value within which you may feel comfortable listing your property. This range will represent property values of homes sold in your area, of your home's style and condition with sale prices negotiated between buyer and seller, both looking out for their own interests and in a transaction without duress - no repos, estate sales, no sales between related parties.
This same logic applies to you as the buyer as well. You want to know that you are committing yourself to a property that is worth the amount of money you will be signing a mortgage and a promissory note to pay over the next 15, 20, 30 years. That this home will be worth the improvements you will put into it over that time frame. An appraisal will be key to answering this question.
You and the court or administrator of any estate, will want to know the real value of the estate and any other property in it before it is distributed. This type of reckoning also occurs in a divorce proceeding. An appraisal will be key to answering this question.
Its also a good idea to talk with an appraiser before you begin any major renovations to get an idea of the payback. This focus can help you to quantify the payback of your desires versus your needs and adjust your budget before you begin the transformation.
Appraisers are the objective voice in these transactions. Appraisers do not work for any particular value, for any set outcomes. Appraisers come to the table empty and follow the facts to a final conclusion. The appraisers voice is outside of the transaction and should be relied upon for competent development.
This is the second in a series of articles published on items that have an impact on your property's value. These are articles are written and composed by me, Rhona Ravenell, the owner of Omega Appraisals, LLC. I am a Certified General Appraiser, licensed in the state of Michigan with more than 15 years in the field. Please visit my web page at www.omegaappraisals.com for more information.
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