I Have An Appraisal!
The next time a seller tells me they have an appraisal, I think I’m gonna barf.
Who really cares about an appraisal in this market, anyway?
Homes are selling for less than appraised value every day.
An appraisal is simply one person’s opinion of the value and nothing more.
And, it’s based upon recent sales history of supposedly comparable properties within close proximity of the subject property.
That’s just great, but we’re in a soft market with ample listing inventory, and homes often sell below appraised value.
Not to mention that many (most?) sales have unreported seller-paid concessions (buyer closing costs, bonus commissions to the selling agent, etc.) that aren’t revealed in MLS statistics.
I recently evaluated a home for a potential listing where the seller said they had an appraisal at $295,000. The home needed some major remodeling, and my realistic estimate of value was $275,000 tops ~ IF they had already completed the remodeling!
I didn’t get far enough to determine the purpose of the appraisal, or when it was completed.
If it was done more than a couple of months ago, it’s meaningless because appraisers are now looking back only 60-90 days for comparable sales.
Considering that this was an older home, the appraisal was probably done for the purpose of refinancing by a lender eager to push as much HELOC money out the door as possible.
Or, maybe another Realtor ® did a napkin market analysis and the sellers were calling that an appraisal?
If so, maybe the Realtor ® was trying to win the office listing contest and quoted the sellers a price they wanted to hear?
I know of another transaction with a sales price of $185,000 (with the seller paying $3,000 of the buyer’s closing costs, which meant it really sold for $182,000) where the appraiser came in at $199,000.
If it was worth $199,000, why did it take nearly three months to get a first offer of $185,000 despite massive marketing, MLS exposure, and 15 showings?
So, if you ask me to list your home and you have an appraisal?
Please don’t tell me.
It doesn’t matter in this market.
Your home is only worth what someone will pay for it.
June 1st, 2008 Posted in Seller Stuff
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