When I perform a market analysis on a Fredericksburg home, I usually come pretty close to hitting the mark. The best thing I can do for a seller is give them my educated opinion on their home’s appraisal value. No matter what amount the seller insists their home is worth or what the buyer is willing to pay, the bottom line is that the appraisal can make or break the deal. The bank lends based on the asking price being in line with the appraisal. You may have heard the question, “Did it appraise?” In real estate, that refers to whether or not the appraisal value of the home matches closely enough to the sale price for the bank to lend on it.
Most appraisers belong to National Associations that comply with strict laws of ethics. Normally, an appraisal is ordered by the bank once an offer is made. When the appraiser visits the home, they take measurements, pictures, view the interior and exterior of the home and even the lot and soil. The appraiser combines the collected information with the comparable sales in the area along with ascertaining future community plans that may affect the home value. A home value is then determined. At this point, the seller hopes that the appraisal value is higher than the offer price and the buyer crosses their fingers in hopes that the offer price is equivalent to the appraisal.
There are some preconceived notions about appraisals that deserve to be addressed. An appraisal value is not to be confused with an assessment value. An assessment doesn’t mean market value. Your state charges you property taxes based on the assessed value of your home as if the assessed value is the estimated market value. But, in reality, you may have made improvements to the interior of your home that has not been reassessed. Another myth about appraisals is that it could be different depending on who is doing it and who ordered it. Because appraisers are an impartial third party that follows a code of ethics, it is unlikely that the appraisal would change much if a second appraisal was performed. Appraisers take a number of factors into consideration such as location, improvements made, amenities in the community, and market trends. The appraisal value is not just based on a formula of square footage and what the home looks like from the outside.
Taking all of these things into consideration, you can clearly see that if a home is not priced right from the beginning, the seller is set up for a big let-down. Finding an expert Realtor who is experienced with your community can ultimately alleviate problems down the road in the selling process. As I have sold homes in most all of the Fredericksburg communities and in all of the surrounding counties, I have become a pretty reliable source for home pricing. It’s important to me that your real estate experience goes smoothly.
By: Tom Smith
Associate Broker, Fredericksburg Realty LLC