I've heard it time and time again - my house appraised for $x, so that's what I am going to list it for. While it's great to know the approximate value of your home before listing it for sale - many sellers are misled (albeit unintentionally) by appraisals. Many times, the "appraisal value" a seller receives can vary significantly from the true "market value" of a home. Here's why...
IF THEY WORK FOR YOU THEY WANT TO DELIVER GOOD NEWS
When you hire a private appraiser, that company is working for you - the seller. Therefore, they want to earn your money, make you happy, and provide you with the highest possible value for your home. The typical private appraiser who comes out will likely use the "Cost Approach" method. This means he or she will estimate the amount it would cost to replace the home with all the improvements, minus depreciation - then add the approximate value of the land. While this method is a handy tool for getting an approximation of the value of your home - to satisfy curiosity, for instance - no sales comparison is used. Therefore, the value determined by the appraiser could be much higher than the market value of your home.
IF THEY BUY UGLY HOUSES IT'S GOING TO BE BAD NEWS
When you call one of the many investment companies out there, it's their goal to make money - not make you money. Therefore, when determining the "value" of your home, they will likely use what's called the "Income Approach" method. This involves estimating what an investor would pay for your home, based on the money he/she would put into it, and what they'd likely profit either by re-selling it, or in monthly rents. SO, if you call 1-800 WE BUY ANY HOUSE IN 10 DAYS - it's true you may be able to sell your house quickly. However, you will likely be given a value that is much less than the market value of your home - and end up "leaving money on the table" at closing.
ONLY A REALTOR WILL TELL YOU WHAT YOUR HOME IS "REALLY" WORTH
When you call a Realtor to do a Comparative Market Analysis (CMA) for your home, he or she will use the "Sales Comparison Approach" to determine the value of your home. This method will help you determine the current and actual market value for your home, as it involves comparing several properties similar to yours that have sold recently. While you could still receive a wide value range if you interview several Realtors, this approach is still your best bet for determining the current value of your home. (Tip: If you do interview several Realtors, look closely at the comparable properties they use to value your home. The more properties the better - and the more recent the sales the better. One or two properties that sold 9-12 months ago really have nothing to do with today's market!)
As you can see, appraisals are more of an art than a science. There are so many factors and methods involved - that it can be difficult to obtain a "true value" for your home. So - the first thing to ask yourself is - why do I want to know the value of my home? If it's because you are thinking of selling - CALL A REALTOR! That is your best bet for getting a current - real market value for your home. After all, Realtors only make money if they SELL your home, whereas appraisers make money just to visit - and investors make money by paying as little as possible!
If you would like more information about buying or selling a home in your area, please don't hesitate to contact me! I am always available to answer your questions - and ready to serve your real estate needs. Your complete satisfaction is my goal - because I want to be your Realtor for life!
Lori Day
Infinity Realty
(816) 200-4372 Cellular
(816) 554-6351 Fax
(816) 554-6368 Office
EMAIL: Lori@LoriDaySells.com
WEB: www.LoriDaySells.com
FACEBOOK: www.facebook.com/pages/Lori-Day-Realtor/198561393044?ref=ts
My Mission Statement:
At Infinity Realty, we make a difference in real estate by saving our clients thousands! Whether you're buying or selling, I WILL save you money; with expert negotiation skills and lowered commission rates. When you hire me, you won't sacrifice service! I promise I'll provide you with a full-service customized client experience, at the highest level of integrity. I do the little things that make a difference - from start to finish, and beyond. Your satisfaction is my mission, because I want to be your Realtor for life!
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