The most important thing on every seller’s mind is the listing price. No one wants to leave money on the table by pricing a home too low. At the same time, pricing the home too high will also likely result in lost dollars either from wasting valuable time on the market or once stale, selling for below market value in desperation. Getting a professional appraisal ahead of time might seem like the solution, but is it?
An appraisal can be defined as an opinion of value at a given moment in time. If you are in an ascending market where listings are selling quickly, the appraiser can only use closed sales as a reference in the appraisal, so you might be tempted to list too low for the market, but not accounting for the increase in sales activity and prices. Contrarily if the market prices are declining, an appraisal received in May could be too high for the erosion of prices seen over the summer, and your listing will be overpriced for the reality of the neighborhood.
More than just these scenarios, a pre-listing appraisal generally means nothing to the buyer or their lender. They will still use current market data to write their offer and their lender will order a new appraisal regardless. While you can reference your appraisal in negotiations, the buyers will still only offer what the property is worth to them and you might miss out on a competitive deal by trying to stick to your price. In the end, a pre-listing appraisal is typically unnecessary for most homes in an active market. Your agent has access to the latest market data and can show you the same comparable properties the appraiser would use. When it comes to highly custom estate homes with few or no comparable properties, a pre-listing appraisal may be useful in establishing a basis for your asking price.
The key takeaway is to find a great local agent with a reputable firm you trust and work with them to price your home correctly. If you’re interested in learning more about the value of your home, contact me for a no-obligation analysis!