What Is a Pre-Appraisal?
Setting an appropriate list price for your house is critical. If you set the price too low, you could wind up getting less than your home is worth. If you choose a list price that’s too high, prospective buyers might not even bother to look at the house. A pre-appraisal can give you an accurate idea of your home’s value in the current market so you can set the correct asking price.
Reasons to Get a Pre-Appraisal
Many sellers believe their homes are more valuable than they actually are. This can be due to a combination of repairs and renovations the owners have made, emotional attachment, and wishful thinking. A pre-appraisal by an objective professional can provide sellers with a reality check.
Licensed real estate appraisers must meet high standards and be able to justify any figures they report. This can help both the seller and the buyer be confident that the appraised value presented is reasonable. It can also help a seller avoid receiving offers that are significantly lower than the home’s value.
What Will an Appraiser Do?
An appraiser will carefully measure the size of each part of the house. Sometimes owners are unsure of the square footage of their homes, which can lead to honest mistakes but may make potential buyers feel that they’ve been deceived. The appraiser will also look at the sale prices of comparable homes in the same geographic area, usually over the past few months. A pre-appraisal typically costs several hundred dollars, but the price may be higher for a house with a lot of land or amenities.
The appraiser may discover problems that could significantly affect your home’s value. If that happens, you can have repairs made before listing the house so you can get a higher price and avoid delays later.
Will Your House Sell for the Appraised Value?
Recent changes in the local real estate market can affect the appraised value of your home. Buyers may not be willing to pay the appraised value if the local housing market has started to decline or if they believe the house has some negative qualities.
A buyer who needs to obtain a mortgage will also have to get an appraisal to qualify for a loan since a lender will not approve a mortgage for more than a house is worth. The buyer’s appraisal may be different than the value assessed in a pre-appraisal. This could be because one appraiser saw something that the other missed or because the housing market changed in the period between the pre-appraisal and the buyer’s appraisal.
Discuss a Pre-Appraisal with Your Real Estate Agent
A pre-appraisal can give you an accurate idea of how much money your home is worth in the current real estate market. Since property values fluctuate over time, this is essential information that can help you and your real estate agent decide on an appropriate list price, but your house may not necessarily wind up selling for that amount.