The price is too high or too low, and you lose money either way. There are tens of thousands of dollars riding on getting this right.

I take this role very seriously because I know what this means to the people I work with. It's not life or death but this is the largest financial transaction most people will ever take part in and there are often negative consequences for the people I work with. You are trusting me to get it right and once the papers are signed there are no take backs.

This explanation is an accumulation of years of careful and thoughtful examination of the home sales process, pricing, and how to produce the highest profit for my clients. This is still only a short summary, the pricing is still somewhat science and art but the goal is always the same. Get the most money!

“Price it too high or too low and you lose either way. There are tens of thousands of dollars riding on getting this right.”

In order to properly explain all that goes into my process I would need to write a book. I broke this down into a short and long version. I appreciate you taking the time to understand how and why I do what I do.

You’re the one who sets the price. My job is to help you make that decision with the information available to us. I look at the property we’re selling, the homes competing against it, and the work that may need to be done before it goes on the market.

An appraisal is part of my process. We can put that information together with what we know about the condition of the house and the cost of preparing it, then talk about what you’re likely to walk away with.

I am not going to agree with an unsupported price simply because agreeing would make it easier to get the listing. I am also not going to recommend a low price just because it would make the house easier to sell.

I hire a licensed appraiser and pay for the appraisal myself because determining value is too important to rely on a Realtor’s opinion.

I hire a licensed appraiser and pay for the appraisal myself as a tool and it provides several benefits to you and me.

You might think "isn't that the Realtor's job?" yes but keep in mind that agents on average list 1-2 houses per year (last year I closed over 10 million in sales.) We wear a lot of hats and determining value is just one of them. Even after being in the business almost 20 years through hundreds of transactions I would not call myself an expert but I know where to find one.

Currently in the state of Maryland a Certified General Real Estate Appraiser must have completed 300 hours of courses approved by the Commission, hold a bachelor's degree or higher, and compiled a minimum of 3,000 hours of appraisal work over a period of at least 1 1/2 years (18 months), at least 1,500 hours of which in non-residential real property appraisal work.

To become a licensed Realtor in the state of Maryland you must be at least 18 years old, complete a 60-hour pre-licensing course, and pass the state licensing exam.

See the difference?

My appraiser has been evaluating homes in Southern Maryland since the early 80's as his primary source of income. He wakes up every day and evaluates the value of homes. Me? I am really good at it but I feel like with the amount of money on the line it's important to bring an expert into the conversation for several reasons.

Donnie evaluates 1-2 houses every day, not 2-3 every month like myself, or 1-2 every year like most agents.

The appraisal is not the be all-end-all but once you understand all the decision making factors it will make more sense.

I bring my experience with buyers, sellers, preparation, marketing, negotiation, and the current competition. The appraiser brings specialist valuation expertise.

Those skills work together.

I have no interest in protecting my opinion of price if better information shows that your house is worth more or less than I initially thought. I want the best information available before we make decisions with your money.

A comparative market analysis, usually called a CMA, is an agent’s analysis of comparable properties.

That information is useful, and I study comparable properties throughout the process. But the quality and depth of that analysis depend on the person preparing it. A few listing sheets and a price per square foot calculation do not explain every difference between your house and the houses around it.

In a newer townhouse community with nearly identical models, recent sales provide a relatively clear comparison.

Most of the homes in Maryland are often much more complicated because they were built in different decades, by different builders, on different amounts of land. Some are in established neighborhoods. Some sit on private acreage. Some have waterfront, unusual layouts, additions, finished basements, difficult access, or features that do not fit neatly into a comparison chart.

Two houses with the same number of bedrooms and bathrooms and similar square footage can offer completely different experiences to a buyer.

Even the sale down the street needs context. What condition was that property in? What concessions did the seller pay? How long did it take to sell? What alternatives did buyers have at the time?

We need to better understand what the comparison actually tells us before using it to make a decision about your house.

Property Measurements Matter

Your house should be represented accurately.

An appraisal with an interior inspection and measurements gives us an opportunity to check the size and configuration of the property rather than relying entirely on old listing information or public records.

Finished basements, additions, and changes made over the years deserve particular attention.

If usable space is omitted or described poorly, buyers do not get a complete picture of what you are selling. If the size is overstated, you create a different problem when the discrepancy is discovered.

Above grade living area and basement space also need to be described correctly. They are not automatically interchangeable just because both are finished.

I want the listing to communicate what you actually have, and I want the information supporting that listing to be as accurate as possible.

A pre-appraisal protects you from underpricing your house. I once helped a buyer purchase a house that appraised for $144,000 more than she paid.

It also protects you from a mistake people rarely talk about: setting the price too low. I have had houses appraise for substantially more than the homeowner expected and more than I initially thought.

Fun fact: You never get to see the buyer's appraisal unless your home appraises under your sales price. I helped a buyer purchase a home in Saint Leonard that appraised for 144k over what she paid!

As a buyers agent I see my buyers appraisals and I often think that if these sellers knew what their home appraised for they would fire their Realtor.

People often think that selling a house with multiple offers over the sales price is the best outcome but that does not take into account what a potentially higher sales price might have accomplished. Without an appraisal, it's up to everyone to wonder if this was the best outcome.

The Appraisal Helps You Evaluate The Result Honestly

Selling for the asking price sounds good.

Selling above the asking price sounds even better.

But those statements do not tell you whether the asking price was right.

A house priced well below its value can generate an impressive number of offers and sell far above asking while still leaving the seller with less than the property could have brought.

The independent appraisal gives us another way to evaluate what happened.

It is not an infallible scorecard, but it provides a reference beyond a list price we selected ourselves.

It also gives you information you should not assume you will receive later from the buyer’s valuation process. I want you to have your own understanding of the property’s value before you agree to sell it.

The independent appraisal keeps us aligned and takes pressure off our relationship. You do not have to wonder whether I recommended a price because I wanted a quick sale or quoted a high number just to get hired.

This is a big one. The last thing I want is for you not to trust what I am telling you. It makes my life miserable and makes your ability to follow my advice complicated. Some people might assume my goal is to lower the price for a quick sale instead of focusing on protecting your equity. By getting an expert opinion of the price it aligns us so that we can both focus on doing what's necessary to get the most money through this process.

The way I look at it is, mortgage companies require appraisers to give their opinion of value because they are the highest measurement available. I want you to have one at your disposal as well.

We use it alongside my research into the market trends, the houses actively competing with yours, the preparation we plan to complete, and what you want to accomplish together to set the price. Nothing less.

Last but not least it also takes pressure off our relationship. You should not have to wonder whether I am recommending a price because I want a quick sale, whether I appreciate your improvements, or whether I quoted a high number just to get hired.

Money brings emotion into the conversation.

If I recommend a price below what you expected, you start asking yourself why. Does he understand how much we spent on the kitchen? Does he appreciate the lot? Does he realize how much better our house is than the other one? Is he just trying to sell it quickly so he can get paid?

The opposite problem exists, too. If I promise a high price and the house does not sell, you start wondering whether I knew what I was talking about or whether I simply told you what you wanted to hear.

The appraisal gives us an independent reference point.

I do not talk to the appraiser and I typically advise my clients to refrain from doing so. If there is anything about the property that is not evident from seing it, we share the information with the appraiser and he will factor it into his calculations.

We can examine the evidence, discuss the property, and compare it with the market without every disagreement becoming a question about my motives or your expectations.

If something in the appraisal looks wrong, we address it. We review the property information, the comparisons, and the reasoning. Hiring an expert does not mean refusing to ask questions.

The goal is for us to work from the strongest information available and pursue the same result together.

The independent appraisal also takes pressure off our relationship. You should not have to wonder whether I recommended a price because I wanted a quick sale or quoted a high number just to get hired. We can examine the evidence, discuss the property, and pursue the same result together.

You know what you paid for the house. You know what the kitchen cost. You remember the work that went into the basement, the landscaping, and the pool.

Those investments are real.

But buyers are comparing your property with the other houses they can buy. They are deciding what your improvements are worth to them in the market that exists today.

That is a difficult conversation when you have put years of money and effort into a property.

I have worked with sellers whose disagreement with the price was really about what accepting that price would mean to them. They had invested heavily and felt that the valuation dismissed everything they had done.

Understanding that matters.

My responsibility is to explain the evidence and help you work through the decision. Pretending the market supports a number because it would make the conversation easier does you no favors.

You hired me to tell you the truth and help you get the best result available.

The appraisal is not the final answer. We use it to guide us and together with my market research I evaluate of the competition, consider any upgrades or repairs you complete, the absorption rate, factor in your timelines, and only then suggest a number for you to consider. Ultimately you set the price we list at, any price reductions and you sign any offers on your home.

The appraisal is an important part of the strategy. It is not the entire strategy.

We also need to look at the houses competing with yours right now, the preparation being completed, the buyers we expect to attract, and your timing.

A house can sell above an earlier appraisal. It can also sell below it.

A beautiful house beside a busy road faces a different buyer response than the same house on a quiet street. A difficult lot, an unusual layout, or a neighboring property in poor condition changes what buyers are willing to accept.

We have to understand those reactions rather than assume a report makes them disappear.

We also have to pay attention to whether the appraisal describes the house as it exists today or includes assumptions about work that will be completed. We should know exactly what the opinion represents before we use it.

Then we choose an asking price intended to produce the strongest result.

A seller who is afraid of leaving money behind often decides that overpricing is the safer choice.

“We can always come down.”

You can lower the asking price. You cannot erase the buyer’s knowledge that the house has been sitting on the market.

At first, buyers are concerned that someone else will get it. After it has been available for a while, they start asking why nobody has bought it.

Is it overpriced? Is something wrong with it? How motivated is the seller? How much room is there to negotiate?

I have stood in a house with a buyer who saw that it had been on the market for almost 100 days and immediately said they would never pay full price.

The seller had already reduced the price several times. That did not change the buyer’s reaction to the time on the market.

The seller sees a new asking price. The buyer still sees a house that has been available for months.

“There’s no reason to write a full price offer unless there’s a reason to write a full price offer.”

My job is to give buyers a reason to compete for your house while their interest is strongest.

An Unrealistic Starting Price Creates An Imaginary Loss

Consider a house with a supported value around $400,000.

The seller believes it should bring $420,000 and decides to start at $430,000 to leave room to negotiate.

After several reductions, the price reaches $400,000. By then, the seller feels as though they have lost $30,000.

That feeling affects everything that happens next.

A reasonable offer feels insulting. Another concession feels unbearable. The seller becomes frustrated with the market and suspicious of the agent.

But the original asking price did not establish that the extra $30,000 was available.

The appraisal helps us establish a realistic reference point before the listing creates an expectation we later have to undo.

I want you evaluating offers against the property and the market, rather than measuring every offer against a number that never had adequate support.

The appraisal helps you recognize a strong offer if you do get an offer quickly.

Along those same lines another benefit is that a pre-appraisal helps you recognize a strong offer when it comes in quickly. Using the above analogy if you get an offer on the first day you might think that you should have priced higher but with an appraisal you can have confidence that you are not giving anything away unknowingly.

That peace of mind is key when these life changing decisions land on your table at 7pm with only hours to make a decision. Most people are not accustomed to making decisions that have tens or hundreds of thousands of dollars in the balance. The stakes are high and for many people, the pressure of these decisions is very stressful.

The appraisal gives us a benchmark for evaluating the offer. We also look at the terms, activity, competition, and your goals.

We should recognize a strong result when it arrives instead of assuming that a quick result means we made a mistake.

The appraisal gives us a benchmark for evaluating a strong offer when it arrives quickly. We also look at the terms, activity, competition, and your goals. We should recognize a strong result when it arrives instead of assuming that a quick result means we made a mistake.

It can anchor your price if a buyers offers less in some cases

In many cases it can also prevent buyers from making their offer based on wrong thinking. They might make an offer on your home based what they think it's worth relying on any number of ridiculous ideas or bad advice from others who encourage them to negotiate aggressively or try to get a deal.

Showing the buyer and the buyers agent the appraisal often helps anchor the price in the buyer and the buyers agents minds. Some people are suspicious minded and think you are overpricing it, and the agent often has nothing concrete to push back with. It makes your position more anchored in something no one is used to seeing because this process is never seen in the market. We use it to our advantage when needed but most of the time no one sees it but you and I.

A house sits on the market, and the seller starts losing confidence. Then a buyer submits an offer well below expectations.

With no independent reference point, that offer starts to feel like proof that the house is worth less than everyone thought.

An appraisal gives us something to examine before accepting that conclusion.

We can compare the offer with the valuation, the current competition, the property’s condition, and the feedback we have received. We can identify whether the buyer is making a reasonable argument or simply testing how much you will give up.

We are not limited to saying, “The seller wants more.” We can explain why we believe the property supports a stronger offer.

The report is a tool. We decide how to use it based on the negotiation, rather than automatically publishing it as part of every listing.

The report is a tool. We decide how to use it based on the negotiation, rather than automatically publishing it as part of every listing. It can anchor the price when buyers or their agents are relying on bad advice, wrong assumptions, or aggressive negotiation tactics.

I often give our appraisal to the buyer’s appraiser to help support the contract price.

After you are under contract the buyer is required to get an appraisal if they are financing the home which they do 95% of the time. I will often give the appraisal to the appraiser to help justify the high sales price. They are very appreciative especially when they are not from the area or the property is very unique.

Our appraisal gives us information before that negotiation begins. It does not replace the lender’s process or guarantee that another appraiser will reach the same conclusion.

After you are under contract, the buyer will usually need another appraisal for their financing. I can give our appraisal to the buyer’s appraiser to help support the contract price, especially when the property is unique or the appraiser is not from the area.

We constantly monitor the market for activity. We are monitoring new listings that are coming on, competing houses that may or may not be going under contract, as well as local and regional market trends.

I don’t put a lot of weight on the feedback. The only feedback I ultimately care about is: what is the offer price, and how serious are the buyers about buying the house? On the other hand, I do want to evaluate how many showings we’re getting and how many offers we’re getting, because added up over time, that kind of feedback is important.

If we’re not getting any showings, we’re probably way overpriced. If we’re getting showings and no offers, we’re probably slightly overpriced. If we’re getting low offers, we’re probably still very slightly overpriced.