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At a time when all transactions from the seller’s perspective are a welcome occurrence, it only makes sense to do anything and everything we can to ensure that things go as smoothly as possible. One area to be wary of is when it comes to the selling price of the home. It is definitely a buyers’ market these days and buyers know it. Their savvy comes to the surface when the most important part of the transaction occurs – settling on a price.
Preparedness on the seller’s part is one way to make sure that there are no surprises for either party. By making sure that the home is accurately priced to begin with, there will be less time wasted in going back and forth, the home will be sold within fewer Days On Market and all sides of the transaction will be happy.
What Exactly is an Appraisal?
An appraisal is when a professional visits a home or property and through a series of steps, observations and comparisons makes an assessment as to what the fair market value is for the property. Typically this is done at the request of a bank that has been sought to provide a loan to homeowners wanting to purchase the home in question, however more and more often existing homeowners are having their homes appraised prior to listing the property on the market.
Among factors that are considered when determining the fair market value of a home are the physical condition of the home, its structure and functionality – plus also the performance of other homes on the market or those that recently sold in the neighborhood. A comparison is made based on other, similar homes in the area.
It is important not to confuse a home appraisal with a home inspection. A home inspection is a detailed account of every last working aspect of the home and its condition, whereas an appraisal is more general. The cost of having an appraisal done is on average anywhere from $300 to $500, with the end result being a detailed report outlining all the factors looked at by the professional appraiser.
What is the Benefit of Getting An Appraisal Done?
In most cases the buyers’ lending institution will have its own appraisal done on a property they have been asked to finance. However as a seller, if you have had one done in advance, it will give you the advantage and edge of knowing the ballpark range that your home is currently valued at so that you can accurately price your property to sell. The greatest advantage is that you can go into a transaction with potential buyers knowing that your price is realistic. There is a growing occurrence of bank-appointed appraisers coming in with values that run less than the listed price and also less than what the buyer and seller had agreed on. To avoid the unnecessary waste of time, loss of interest in the property on the buyers’ part or the potential loss of sale altogether, it makes sense for the seller to know what to expect in advance.
How to Prepare for an Appraisal
Our tips on how to get ready for an appraisal can potentially yield a better result.
- Complete all maintenance (interior and exterior) including correcting any problems plus maintaining the yard and home’s exterior
- Share with the appraiser all new installations and improvements made to the home
- Be aware of selling prices of other homes in the neighborhood
- Be ready to explain and demonstrate why your home is different than others in the area
- Maintain up-to-date knowledge of your real estate market prices
- Keep a polite attitude with the appraiser and provide them full access to all areas of your home
- Treat your appraisal day as if it were an open house day, keeping your home in tip top shape, neat and clean so they can see the home for what it is rather than have their judgment be clouded by distractions