Selling your home is a big decision. But, once you have made up your mind to sell, there are many things to factor into the equation when selling.
We all know that it is important to have your home in pristine condition. This will help you bring in top dollar in the shortest amount of time.
However, we find one of the most important aspects in selling a home is to have your home priced competitively. In our previous article we explained what a CMA is (Comparative Market Analysis). This is research performed by a Realtor who will help you arrive at the right price. This is not an appraisal. Realtors are not appraisers. When we have concluded our research through our analysis, we feel we should be close to a competitive price.
Today, we have found that the lending institutions are playing a large part in determining what price your home will sell for. The bottom line is the appraisal, no matter what the price on the sales contract, will determine the worth of your home.
After the crash of 2008, the lenders have become very stringent with loan approval. In the past the lenders would allow the buyers to select their own appraisers. Today, the lenders assign the certified appraisers. This is done on a rotation basis.
Let us give you an example of how an appraisal can affect a sale: There was a situation where our clients home was sold for full price. The seller was elated. This home was sought after by multiple buyers in a short amount of time. The buyers saw value in this home, but the appraisal came in a little below the selling price. The home was in pristine condition and similar to the others, but the square footage was less than the other homes that were sold. Now we were back negotiating on whether the seller wanted to reduce the price, as the buyer did not want to purchase a home that did not meet appraisal. The seller and the buyer were able to come to an agreement on the sales price. All ended well.
Appraisers may have a difficult time arriving at the price a home should appraise at. Most of the time appraisers may not have been in the other homes he is using to compare your home to. They will use around four to five homes or properties that are comparable. Square footage, location and water frontage will play a large part in determining the value.
Most homes will appreciate if they have been modernized, remodeled and are situated on water. The value of a home is not determined by personal property.
To conclude, we highly recommend having your home appraised before putting your home on the market. We all would like to get the best price on our home, but most buyers will have an appraisal done whether it be a loan or cash.
THOUGHT FOR THE DAY: Winners are not people who fail but people who never quit!