How Much is Your Home Worth?

Good question!

There are four answers depending on who is answering.

First, you have your opinion.

Second, if your home is on the market and buyers look at it, there is the buyer's opinion.

Third, there is the real estate county assessor's opinion.  This is what drives the amount you pay in taxes.

Fourth, there is the appraiser's opinion.  A buyer will, in most cases, go to a lender for a loan.  The lender will order an appraisal through a third party company which contacts an appraiser.   The appraiser will visit your home, hopefully for an inside visit, and make a judgement on value.  Why is the appraiser so important?  If the appraiser does not support the agreed on contract value, the lender will not make the loan.  

So, of the above, which is the most important.

The buyer is probably the most important.  If a buyer thinks your home is overvalued, they will probably move on to find a home which they think is priced right for what the home is.  Keep in mind that buyers in our area are very smart and sophisticated.  Most know far more about prices than sellers do.  Keep in mind also that there has been so much negative talk about home values declining that buyers do not want to pay too much.

The second person who has a great deal of influence on a home sale is the appraiser.  If they do not see the value in a home, it will be hard to get a contract to settlement.  Mary Ann Cochran makes it a point to meet the appraiser and give them information on the home, the neighborhood, and other homes which have sold.   Why do this?   Sometimes, appraisers are not local.  Other times, there may be homes sold that they overlook.   That is why it is important to work with an agent who researches the market fully.

The rules for how appraisals are done have changed since the housing crash a few years ago.  Lenders now cannot talk to appaisers.  Third party companies connect the lender with the appraiser.  This has its own problems.  Sometimes a wrong type appraisal is ordered.  Sometimes the appraiser is not local.  More often than not the appraiser does quite a number of appraisals in one week and is just getting the job done.   If there is a problem, it does not impact the appraiser in the future.  Why?  he may never work for that lender again.  The third party company is simply a processor.  It does not impact that company if the loan does not settle.   That is why the appraisal can be a wild card in the selling of a home.

As a seller, you do not have to sell your home unless you get what you want.  However, if it is time for you to move because of what is going on in your life, you will need to pay attention to what the market is telling.   If you put your home on the market at a price you want without good counsel on what the market is saying about value, you may find that buyers pass you by, and your home becomes a stale product on the market.   Neither of these things will get you moved on to your next dream.

Mary Ann Cochran does extensive analysis to help sellers price their home in the right range to attract buyers and to be realistic when getting a home appraised.  

The market in 2011 is one of the most complicated market Mary Ann has seen in over 25 years of work.  Her experience will help you avoid many pitfalls.