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If you would like to understand the process, here it is in a nutshell: Three of the most common means of determining the value of your home are offers received with exposure to the market, an official appraisal by a licensed appraiser, or a current/competitive market analysis (CMA) prepared by a real estate sales professional.
Market exposure is often difficult to address without the benefit of having conducted a bit of research into the prices and external influences in the immediate neighborhood. What if the price you pull out of the hat is too low? What if it is too high? Visit my web page with advice for home sellers for background on this topic.
An appraisal will typically cost the person requesting it between $550-$1400 or more, for a single-family residential property.
And in some cases, the appraiser may plot out a projection of anticipated depreciation or appreciation based upon local market conditions. This figure varies by region and by purpose of the appraisal. It may also be influenced by the uniqueness of the property as well as the quality and size. With a professional appraisal, the appraiser will need to visit the site, make a drawing of the exterior walls of the home and outbuildings, to take photos and detailed notes regarding the condition, quality, location and amenities. Back in his office, the appraiser will compare your home with the home sales prices for homes in the area. The appraiser will make calculated adjustments for age, size, quality, condition, amenity and location to try to make the properties being compared reflective of the subject properties' attributes. The appraisal will also typically include a cost/depreciation approach as a cross-reference. At the end of the process the appraiser will render an opinion, called the value conclusion about the home. This is the appraiser's estimate of the sales price the house would bring if exposed to the open market for a reasonable period of time in an armslength transaction.
The third method, a CMA prepared by a licensed real estate sales professional, is less official than an appraisal. (Because it is not prepared by a licensed appraiser, the CMA may not usually be accepted in a court of law to settle a dispute.) This service is commonly provided at no obligation and no cost to the seller.
First, the real estate agent will need to make a visit to the property to confirm the visual appearance of the home, the quality, condition and location amenities much like an appraiser would. Working from either tax records, or previous appraisals, the agent will often use the basic information contained in these to develop a profile for the property. After the profile is developed the agent will compare the home with the current listings and the closed escrows in the neighborhood to arrive at various price bands to assist a seller in pricing their home for market. This is where the agent's knowledge of the inventory specific to your neighborhood is critical in assisting a seller in obtaining top dollar for their home.
The best comparable listing is one that has most recently closed escrow. In any market, the closed listings bear the most weight toward determining a price range for the seller. The listings that are currently active or pending may be a reference for the high-end of the market value range only. Listings are not indicative of value until they receive an offer and close escrow (Unless prices are dropping and new listings are priced lower than recent sales). In a market analysis, the agent will be able to summarize the typical price ranges, sizes, and length of time on market that statistically occur in the market area being studied. The agent will also be able to provide the seller with information about the average listing price vs. sale price ratio for the area. These are tools that the seller may use to assist in pricing their home for market.
If a property is to be exposed to the open market, ultimately it is the seller who determines the list price after having discussed comparable sales data and pricing strategies with the listing agent.
It is also a good idea to talk to more than one agent before you list your property. Compare the agent's knowledge of your neighborhood sales history, their marketing skills and their references from past clients. Consider what the agents are offering and find a confident, approachable, ethical person, whom you are comfortable with, who offers you the best overall value to act as your representative. Find an agent who is well respected among their peers, as well as easily approachable to potential buyers. The listing agent has the task of marketing your home to agents as well as directly to buyers. With her extensive background as a former appraiser and her "boutique style service" tailor made for marketing each property, Alicia promises to provide you with the ultimate real estate experience whether selling or buying a home.
Contact Alicia today (800) 635-3639 or email SOLD@AliciaReid.com. Thank you!