5 Reasons Why A Realtor Should Consider An Appraisal
The fact is that for the vast majority of listings an appraisal will not be necessary. However, every so often the oddball listing comes along and trying to determine a list price presents a case of “value-block”. The good news is: we provide high-quality appraisals in a timely manner and can offer a variety of appraisal products dependent on your, or your clients, needs. That being said, here’s my top 5 reasons real estate agents should consider a professional appraisal:
- Sellers Bias
This one is probably the most obvious. You have a seller who is very attached to their property. Despite the fact that you’ve presented plenty of market analysis and data on competing properties, the owner still believes their property is superior to all the sales and listings in the neighborhood for one reason or another. All the while the property remains on the market for longer than most of the competition and is becoming stigmatized, adding to your marketing difficulties. We all know appraisers are the only truly neutral, non-biased party to a real estate transaction. I suggest using that to your favor! Allow the appraiser to provide their analysis and determine the fair market value for the property, taking the pressure and liability off you.
- Cash Sale
In a cash sale, an appraisal is not required, but having an appraisal completed during the pre-listing phase of the process may help put a buyer and/or seller at ease an eliminate any “surprises”. Not to mention a deal done without any input from a certified appraiser presents liability concerns. In a cash transaction with the buyer and seller being represented by their respective individual or mutual agent(s), any liability falls squarely on the listing and buyer’s agent. Most cash transactions can be overseen by a qualified/ethical agent. However, there are occasions when relying on a professional appraisal to determine highest and best use of a property is warranted. The cost of an appraisal, in comparison to the value of a home, is a minimal expense. While an appraisal will not absolve an agent for their ethical responsibilities, it can be a reassurance to both the buyer and seller and limit any potential complaints after closing.
3. Confirm the Gross Living Area
Last month I received a phone call from an agent. He was holding an open house for one of his listings when a neighbor stopped by (looking for home décor ideas). The neighbor informed the agent tax records show that the listing and the neighbor’s house are model match homes. But the neighbor went on the say that his home does not have the additional rooms on the second floor. The agent asked that I measure his listing to determine an accurate GLA. The difference between tax records and the actual measurements was almost 800 sq ft. Las Vegas Appraisal Co. offers home measurement services independent of an appraisal. However, if an appraisal with a full interior inspection is required, let the appraiser know you may want to use the sketch in your marketing materials for the listing. A listing with an inaccurate livable area could leave your seller or buyer out thousands of dollars.
4. Unique Property
This is most common reason we get calls from listing agents, the property is unlike anything in the neighborhood, and the agent cannot determine an accurate listing price. These assignments are always complex in nature and require a very defined scope of work to determine accurate value. In these cases, you want an experienced qualified appraiser for the job. Not all residential appraiser are experts in the same type of properties. While I have the education and experience to appraise Green/High Performance homes my partner is best suited to appraise high end equestrian properties. Agents are best served to provide the appraiser with as much information as possible, even meeting the appraiser during the inspection to answer any questions they may have. Be prepared to wait longer than the typical report for the results of the unique property.
Most agents think the cost of professional appraisal services are expensive and that a full interior inspection is necessary for every assignment. However, there are a variety of products available to agents that won’t break the bank. Appraisals reports can be completed without an inspection. An agent can submit photographs of the property and provide the appraiser with a detailed description of the condition, upgrade features, energy efficiency, items that offer contributory value, or any features that could have a negative impact marketability/value. These “desktop” assignments are perfect when cost and/or time is a factor. It should be noted that a desktop appraisal may not be suitable in all scenarios. It is up to the appraiser to determine if credible results can be obtained in a desktop assignment.
Not sure if you may still benefit from an appraisal? Want more information on the variety of products we offer? Our professionally trained and licensed appraisers are always here to help. For larger brokerages, we are available to come to your office and facilitate a presentation with Q&A. Call us today at 702-894-9279.
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