People often confuse an appraisal value as the number they should list their home for sale for. This is often a misguided number and could get a homeowner stuck on an unrealistic sales price. This can get really frustrating for the seller. The appraiser is not looking to live in your home. They don’t care about the flow of your floorplan, the color of your walls, or if you have dark cabinets vs white cabinets. But a buyer does!! We’ve all heard the saying “A home is worth what someone is willing to pay for it”. There’s some truth to this!! A home is not like looking up the value of a car in KellyBlueBook.com
, there are way too many components to a home vs. a car and Zillow’s Zestimates
surely isn’t your answer!
Here’s an example that happened recently and why I’m writing this. I walked into a client’s house and they handed me an appraisal they just paid $500 for. As I looked at the properties used on the appraisal that helps determine the subject home’s value, I noticed a few things that make a big impact on most of today’s buyers. The home I was in had burnt orange walls in the kitchen, candy apple green paint in the kid’s rooms, and very dark granite countertops throughout! It was a good paint job and the granite was installed correctly but almost any buyer would look at that and know that there’s going to be some cost they need to consider because those paint and granite colors just don’t jive with most buyers of today. Now on the appraisal, I noticed homes with grey and white wall colors and gorgeous white granite throughout. This tends to be much more appealing to “most” buyers therefore they’re not worried about repainting the home or changing the granite so their offer will most likely be more!
To an appraiser, of course, he/she can see this. But Sherman Williams Burnt Orange and Agreeable Grey cost the same amount, granite is granite in “most” cases. Therefore to an appraiser, cosmetics don’t matter from a value standpoint as much if in good condition. But to a buyer, that’s potentially a $7,000 paint job and $6,000 in granite. Those 2 houses most likely will not sell for the same unless the seller paints the home first or drops the price to offset the cost of that paint job/granite. Now, will a buyer come along and love these colors? Of course, that’s a possibility. But to increase your chances of selling your home faster and for more money. Your home needs to be appealing and updated to what “most” people want. This will increase your chances of getting top dollar! An appraisal DOES NOT determine what your house will or should sell for!! It’s just an educated opinion of what the appraiser thinks of its value and is mostly used to show the bank the home is worth what the buyer is willing to pay when a price is agreed upon!
Take a look at new constructions houses for sale in the Lafayette, LA area as an example. Ever wonder why the majority all look similar? They all have similar colors, floors, granite, light fixtures, square footage etc. You’ll see an entire street of houses sell for almost the exact same price. Why? Because if they started making all these drastic cosmetic changes to every house they build sooner or later they’ll get some that just aren’t as appealing so the sales price will start to fluctuate up and down. They cost the same to build and all appraise for same amount. But some are more desirable and some are not. Builders and their team do TONS of research to determine what sells and for how much. Once they figure out a size and style in a particular neighborhood they stick with it. This helps them set the prices to allow them to stay on budget and make sure their homes consistently appraise.
Realtors Can Give You An Accurate Sales Price
A Realtor has access to the same data an Appraiser does and you can actually sit down with your Realtor and go through the process together to determine an accurate sales price! You can sit alongside your Realtor and look at comparable properties to come up with an accurate sales price that’s driven more to what buyers like in today’s market! Best part is, it’s free! Your appraiser isn’t going to sit next to you and point out these things. Again, appraised value vs how desirable it is to a buyer is two different things.
If you wish to get your home appraised before listing it is totally up to you. I decided to write this article to make people aware that spending $500 on an appraisal and expecting to get that exact number when it sells is just not realistic.