Above Appraisal how much should I List My Home?

In a seller market it is not uncommon for homes to sell above their listing price or even above their appraised value. But how much does your house really cost? Correctly pricing your home is challenging but there are tools you can use including hiring an appraiser to complete a pre assessment.

A pre evaluation can be a great jumping off point to identify the correct asking price.with a pre appraisal in hand you can work with your real estate agent to assess market conditions and see if you need a higher or lower price then the appraised value.you will find information about your local market on our Home Values page just search by your city neighborhood or zip code

Whether you should value your home above its valuation depends on the accuracy of the appraisal local market demand neighborhood appeal and the likelihood of you getting a cash buyer. 

If you sell a buyer with financing their lender will order another appraisal before closing to protect from lending more than a home. In that case it is ideal to list at a reasonable price or even a less so the deal goes through easily. But if you have a cash buyer they do not want to behold a lender to be evaluated so they can offer the amount they want.

What is pre listing home assessment? 

A pre listed home appraisal occurs when a professional licensed local appraiser analyzes the condition of your home to determine its value. 

That appraiser also considers similar homes that have recently been sold in your area. There is always room for error as the appraisal includes both the technical appraisal and the professional opinions of the appraisers about various features of your home.

What does an evaluation take into account:-

• Square footage
• Number of bedrooms and bathrooms
• Age of home
• Age of mechanical systems
• Condition Layout and Finish
• Location & Nearby Facilities
• Comparative Recent Sales

What does the assessment not cover?

Appraisers are looking at the technical and economic aspects of a home and cannot be responsible for the human aspect of real estate buyers will eventually pay what they think a house is worth depending on how bad they buy it. Want to. In a seller market many buyers are also willing to pay cash to differentiate between the appraised value and the offer price. 

While an appraisal gives you a good idea of the value of your home there is no way that your appraiser can predict how your home will actually perform in the open market. Maybe you will get 10 offers and the price will go up.

It may remain in the market for weeks or months and you will need to reduce the price. These are things for which no appraiser can. If you are looking for a list price estimate that weighs all local market factors review Comparative Market Analysis (CMA).

Should I get an evaluation before listing? 

Pre appraisal is not required but it can be a good idea if you have recently upgraded a lot of homes and you are not sure how much value they have added. They will also be helpful if you do not have good comparative listings in your area or you are going to sell for sale by owner (FSBO).

If you are an extreme buyer or seller selling in the market your home may sell well above or below your appraised value so ask your agent if they think it makes sense for you to pre appraise.

Assessed value vs fair value vs fair market value 

When determining the best listing price for your home, you can hear three different words:values thrown around : 

• Rated value
• Fair value
• Fair market value

It is important to understand the differences between the three so that you can be sensible about deciding the value of your home.

Rated value

The assessed value of a home comes from the local tax assessor office usually on an annual basis. This is the figure they use to determine how much you owe in property taxes. The appraised value of your home is usually much lower than an appraised value or fair market value so it should not be used to determine the listing price.

Appraised value 

The appraised value is the number that your professional licensed appraiser gives you after evaluating your home and reviewing a comparable sale. For example suppose your house is similar to a recently sold street but you have updated the kitchen.

Fair market value

The fair market value of your home is the amount a buyer is actually willing to pay for your home. What a buyer decides to offer is based on various factors including local market and economic condition interest rate demand employment and their personal attachment to the home.

Many sellers keep their listing price away from what they feel is fair market value as it is the most comprehensive pricing strategy. Depending on the state of your market sellers sometimes price their home somewhat under fair market value in hopes of provoking a bidding war.

How do you find your fair market value? 

Your real estate agent should provide that measures the positive and negative characteristics of your home as well as local market trends and demand.

Option to use a pre evaluation

If your pre listing budget is tight and you do not have an agent to help you determine the fair market value of your home consider using these tools in exchange for a professional evaluation:

SuGanta Offers 

You can get an estimated fair market value for your home using the SuGanta Realty Services llp offer. Just answer some questions about your home and take pictures of one or two smart phones. If your home is eligible we will send you a no objection offer so you can get a feel for what your home can sell. And if you like the offer you can sell directly to SuGanta.com and leave the hassle of listing altogether.

Tips for using an appraisal to determine the listing price:

When you are ready to set your listing price stay close to the fair market value of your home to avoid being too low from the buyer valuation.

Inspect comps

Look at the comps shown in the evaluation report.

Are these really good comps? 

They should be sold recently as close to the location of your house as possible and similar to your home in terms of size or number of bedrooms and bathrooms and lot size.

If you find something that supports a higher market value then explore additional comps. If you have a compass supporting your desired list price you can pass them to your buyer appraiser before completing your analysis.

Do not overdo 

There is no magical dollar value in your valuation figure to find the right list price. Evaluations vary sometimes they are too low sometimes they are too high and sometimes they are correct. If you feel that your valuation has gone too high do not be tempted to list your home for that inflated value.

Overprinting can lead to price reductions or stale listings both being red flags for buyers. You may also get an offer from a keen buyer but the deal may fall when their lender makes their assessment and comes back with a lower number more on that later.

Keep search parameters in mind

Buyers searching for homes online search up to a certain price point usually a round number so keep that in mind when you price your home.

Will my house evaluate the buyer for the selling price?

Remember that even if you do a pre listing valuation your buyer lender will likely have to complete another assessment as a condition of closing. If you have cash buyers they can forgive their valuation.

Assuming your buyer lender is making an appraisal you will need to get back to or above its sale price for the deal to proceed. While there is no guarantee that your home will be assessed at the sale price a low valuation is a major risk in a seller market. When a bidding war or a low supply of houses offers an increase in prices it is more likely that the buyer valuation will not accelerate.

Problems when selling a house for more than the appraised value

Even if you price your home based on the results of your pre appraisal there is no guarantee that the buyer appraisal number will match. If the buyer appraisal report is less than the agreed upon purchase price the lender does not accept as financing.

According to the SuGanta Realty Services llp Consumer Housing Trends Report 2019 there was a 10% drop between buyers and sellers in the last 6 months.

Can a house sell for more than the appraisal?

If the selling price returns more than the buyer valuation the deal will not be canceled immediately. Here are some ways to move forward:

• The buyer can make a difference in how much the bank is willing to finance and the sale price.
• The buyer can challenge the valuation.
• If you are financially competent you can offer seller financing.
• The buyer can pay cash for the entire purchase if they have the money.

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