Why get a pre-listing appraisal?

It helps you have the correct square footage

One of the advantages of getting a pre-listing appraisal is that you will know the accurate square footage of the home. This helps in pricing and insures that there will be no issues related to square footage when the mortgage appraisal is done.

I have witnessed a potential problem when the listing agent thinks the house has more square footage than it does. This typically results in a list price and a contract price that is higher than it should be.

These are the situations where appraisals usually come up lower than the contract and deals fall apart. This can be avoided with a pre-listing appraisal that has accurate square footage.

Helps to establish a list price when there are no comps

Appraisers have the market knowledge to know where to look for sales when none are available in the subject neighborhood. Whenever sales are scarce it is a good idea to look at sales, listings, and pending sales from a variety of competitive market areas to get a broad picture of the market.

Helps to establish a price for a home that is much different than the others

Let’s face it, not all homes are the same. A home that is like all the others is easier to price than one that is very unique. Knowing where to look and what to look for is a skill a good appraiser will have.

Sometimes it may not be possible to find an exact match to the home being appraised but knowing what you can use as a comp and from what areas you can look is helpful in the valuation process.

Prices the home to the market and not unrealistic expectations

A pre-listing appraisal gets a fresh set of unbiased but expert eyes involved. An appraiser is the only impartial party to a home sale transaction.

This can help price the home more realistically. Buyers will not have any warm and fuzzy feelings about the house and want to pay more for it than they can get another similar home for so why price it this way? That’s what pricing to the market means.

The home had recent extensive renovations

I’ve seen numerous situations where homeowners have made extensive renovations to their homes so they did not know exactly how big it was nor how much they could ask for their newly improved home.

If they had gotten a “subject to” appraisal before making the improvements they would have had a better idea of what effect the value of the improvements would have. A pre-listing appraisal in this situation will help them price it to the market and avoid a long marketing time and excessive price reductions to get it to where buyers will consider it.

Conclusion

As in every situation, there are always pros and cons that need to be considered. Pre-listing appraisals are not needed in every situation but knowing when it can facilitate the sales process is crucial.

The cost of the appraisal is minimal when compared to the value it brings to the sales process. If I can answer any questions about how an appraisal may be beneficial to you please give me a call and as always thanks for reading.