Dear Real Estate Agents,You have been approached by a homeowner asking you to sell their home. You’ve looked at the property and interviewed the sellers to determine their needs. It’s time to sign the listing agreement. What is your marketing plan for the property?
Most homeowners have viewed the numerous online valuation systems, such as Zillow and Trulia, before they called you to list their property. They already have a price in mind based on their extensive research. If it’s online, it is the truth right? Is a pre-listing appraisal part of your marketing plan? If not, you might want to reconsider, as this small investment can save you a lot of time and money in the long run.
The National Association of Realtors reports that over 15 percent of home sales are delayed, renegotiated or canceled due to home appraisals falling short of the contract price. When this happens, typically, the appraiser is blamed for a low appraisal. Do you think the appraiser intentionally valued the home at a lower amount to kill the deal? Why would an appraiser do this? They are an independent party to the transaction. Is it possible that the home was not priced according to the current market?
It is understandable how this can happen. As an Agent, you are working with the seller. You know their situation; you know the price for which they are expecting to sell the house. It is easy to develop an emotional connection and you want to please your client. How many CMA’s are completed that start with a price in mind and the sales search is for prices in that range only? Are adjustments calculated for the differences in the contributing factors? The CMA process could be the problem with incorrect pricing. The appraisal process is just the opposite of how many CMAs are completed. An appraiser will review the property and take into account all contributing factors, which are then compared to the recent sales in the market. The value is the last piece of the puzzle. This is an unbiased opinion that is necessary to obtain a realistic value. This is exactly why lenders require an appraisal, instead of relying on an Automated Valuation Model or a CMA.
Some benefits of a Pre-listing appraisal
If you do not have a good appraiser in your database, get referrals and use a designated member of the Appraisal Institute. These professionals have met stringent educational, professional and ethical requirements that surpass many of those required for state licensure and certification. Designated members are required to adhere to a strictly enforced Code of Ethics and Standards of Professional Appraisal Practice. The difference between a designated appraiser and a non-designated appraiser is similar to the difference between a REALTOR and an agent.
So, if you want to achieve excellence and be successful, use the professionals in your sphere to assure quick and accurate transactions. Before you know it, you will be a top producer in the Circle of Excellence!