When you’re ready to put your house on the market, one question might stand out: “Should I get an appraisal before selling my house?”
At a glance, the short answer leans towards ‘no’. However, the world of real estate is rarely straightforward, and this decision is no exception.
In our blog post, we’ll dive into the key variables that shape the answer to this question. While a pre-listing appraisal – an evaluation of your home’s value before it’s listed for sale – isn’t always necessary, it can be a crucial step depending on your specific circumstances.
Whether you’re a first-time seller or have been through the process before, we’re here to shed light on factors that will help you determine the best course of action for your home sale. Let’s explore together the nuances of this important decision in the home selling journey.
Reasons to Get an Appraisal before Selling
Selling your home is a significant decision, and getting it right means knowing its true value. In specific situations, obtaining a pre-listing appraisal isn’t just beneficial, but almost essential. With 20 years of real estate experience, we highlight key reasons why getting an appraisal before selling could be a wise choice:
- You Disagree with Real Estate Agent’s Estimate: You may find yourself disagreeing with your real estate agent on the estimated price of your home. An unbiased evaluation gives a fair value, offering a new viewpoint that can confirm or provide new understanding.
- Scarce Data on Comparable Properties: In areas where comparable sales data is limited, accurately pricing a home becomes challenging. An appraisal can fill this gap by providing a detailed analysis of your property’s value, taking into account its unique features and the broader market trends.
- Unique Property Features: If your home stands out in your neighborhood—whether it’s due to architectural design, historical significance, custom renovations, or other unique attributes—an appraisal is crucial. Standard market analyses may not capture the true value of these distinctive features, but a professional appraiser will.
- Selling the Home Yourself (For Sale By Owner – FSBO): When you choose the FSBO route, you take on the responsibility of pricing your home without the direct guidance of a real estate agent. In this scenario, an appraisal becomes a valuable tool, providing you with a reliable starting point for setting your price and negotiating with potential buyers.
- Homes with Larger Size or Significant Land: If your property is larger than most in the area or includes a substantial amount of land, determining its market value becomes more complex. An appraisal can accurately assess these additional factors, ensuring that the unique aspects of your property are appropriately reflected in the price.
By understanding these reasons, you can make a more informed decision about whether a pre-listing appraisal aligns with your specific situation. Each home and each sale is unique, and in these scenarios, the benefits of an appraisal can be particularly impactful in achieving a successful sale.
Home Appraisal Before Selling: The Pros and Cons
Before we delve into the list of pros and cons, let’s take a moment to understand what a home appraisal before selling really means for you as a homeowner.
An appraisal report gives you a professional’s estimate of what your home is worth. This can play a pivotal role in how you decide to price and sell your house. But, just like any important decision, getting an appraisal has its own set of good points and not-so-good points.
In the next section, we’ll go through these points carefully. Our goal is to help you figure out if getting a home appraisal before selling is the right move for you. Which, in turn, makes your journey in selling your home a bit easier and clearer.
PROS
Accurate Pricing
A key benefit of a pre-listing home appraisal is the ability to set an accurate price. This assessment determines the appropriate price for your home based on the market. It ensures that you don’t lose money by setting the price too low. Additionally, it prevents scaring away potential buyers by setting the price too high.
Attract Serious Buyers
An appraised value demonstrates to potential buyers that your asking price is backed by a professional evaluation. This can attract serious buyers who are more likely to engage in negotiations, knowing the price accurately reflects the home’s market value.
Negotiation Leverage
Having an appraisal can provide leverage in negotiations, especially if you receive offers below the appraised value. It serves as a strong justification for your asking price, potentially leading to a higher final sale price.
CONS
Additional Cost
The most significant drawback is the upfront cost. The typical price of a full appraisal can range from $400-$500. Though the upfront cost could deter some, it’s important to weigh this against the potential long-term benefits, such as achieving a higher sale price or avoiding prolonged market listings due to incorrect pricing.
Early Appraisals May Not Account for Changing Markets
A pre-listing appraisal reflects the value of your home at a specific moment. In a rapidly changing market, this value might not accurately represent market conditions at the time of sale, potentially affecting your pricing strategy and negotiations. Ideally, sellers should aim to have the effective date of the appraisal be as close to the listing date as possible. Thankfully, with TAG, we can have your report to you by the end of the week!
Understanding these pros and cons is crucial in deciding whether to get a home appraisal before selling. Balancing these factors against your personal and market circumstances will help you make the most informed decision for your home sale.
So, Can You Sell a House Without an Appraisal?
We often encounter homeowners who wonder if it’s possible to sell their house without going through the process of an appraisal. The simple answer is yes, you can. However, understanding the implications of this choice is crucial to ensure a smooth and successful sale:
Reliance on Market Analysis: Without an appraisal, sellers often turn to a Comparative Market Analysis (CMA) done by their real estate agent. This analysis looks at similar properties that have recently sold to figure out what your house might be worth. CMAs are handy, but they might not always pick up on the special things about your house like a professional appraisal would. Realtors typically do a good job on performing CMA’s, but getting an appraisal could give you extra peace of mind about your home’s value. With an appraisal, you have solid numbers to back up what your home is worth.
Buyer’s Financing Considerations: If your buyer is obtaining a mortgage, their lender will likely require an appraisal to ensure the loan amount doesn’t exceed the home’s value. In this scenario, the sale price can be influenced by the lender’s appraisal, which you, as the seller, have little control over.
Potential for Pricing Challenges: Without an appraisal, you might price your home based on instinct or incomplete information. This can lead to setting a price that’s either too high, risking a longer time on the market, or too low, potentially leaving money on the table.
At TAG, we believe in empowering homeowners with all the information needed to make informed decisions. While you can sell your home without an appraisal, doing so requires careful consideration. Understanding your local market, the specifics of your property, and the needs of potential buyers are all critical in this decision.
Do You Need an Appraisal to Sell a House? Our final word
As we come to the end of our discussion, let’s circle back to our main question: Can you get your house appraised before selling it? The simple answer is yes, you can. But when you ask yourself, “Do you need an appraisal to sell a house?” the answer isn’t as straightforward; it’s more of a ‘maybe’.
Selling your home is a journey filled with important decisions, and the choice of whether to get an appraisal is one of them. Whatever path you choose, remember that it should align with your goals, financial considerations, and the unique aspects of your property.
Remember, every home selling journey is unique, and at TAG, we’re here to provide the guidance and expertise to navigate yours successfully. Whether you choose to pursue an appraisal or not, being informed and prepared is key to a successful home sale- TAG us in!