Before we put a number on it
When you ask me how much your house is worth, there are a couple of important things to consider. I need to look at the property we’re selling, the homes competing against it, and what you plan to do before it goes on the market. A house that needs work and that same house after the work is finished may attract very different offers.
You may not know yet whether you want to fix anything up. You may have a budget in mind, or you may want to do as little as possible. We need to work through that before treating a price as the answer. I want you to know what the repairs are likely to cost and what you’re likely to walk away with, so you can make those decisions with the information in front of you.
Why I pay for an appraisal
Once we’ve agreed to work together, I hire a licensed appraiser and I pay for it myself. I want an independent opinion from someone whose job is to evaluate the value of houses.
If you’re selling a house in a newer townhouse community where the units are almost identical, it can be fairly easy to compare them. Here in Southern Maryland, houses can be very different. They’re built at different times, by different builders. Some are in neighborhoods and some aren’t. Looking at a few houses online doesn’t necessarily tell the whole story of your property.
The appraisal is not the final answer. It’s one factor in a larger set of decisions that are ultimately decided by the homeowner. We put it together with the condition of the house, the preparation we’ve agreed on, and the other homes a buyer can choose from.
“Once we’ve agreed to work together, I hire a licensed appraiser and I pay for it myself.”
~Brian
The highest estimate is easy to like
If you have several agents coming in and one tells you your house is worth more than the others, it’s understandable that you would feel more attracted to that person. You want the most money. Why wouldn’t you pay attention to the highest number?
But there is an incentive for an agent to give you a higher number to get the listing. That doesn’t make your house worth more. Having an independent appraisal gives us something to discuss beyond whether you agree with my opinion or I agree with yours.
One of the biggest risks a homeowner takes is underpricing their house and giving their equity away. I don’t want that to happen to you. I also don’t want you going through the frustration of dropping the price over and over because we started with a number the market wouldn’t support.
What happens when an offer arrives?
If you receive an offer quickly, the natural thought is that there must be more coming. Sometimes there are. But an early offer deserves a careful look. That buyer may be trying to get the house before someone else does. Some buyers negotiate the price up to get an offer accepted quickly.
The appraisal gives us another point of reference when we’re looking at an offer. We also have to look at the terms, any costs you’re being asked to pay, and the work you’ve already agreed to do. The goal is the money you walk away with at settlement.
And if the house doesn’t sell?
I keep looking at the homes competing against yours. If new listings come on or other sellers lower their prices, we have to take that into account. The price that made sense when we started deserves another look if the choices available to buyers have changed.
After a house has been on the market for a while, buyers may stop worrying about losing it to somebody else and start concentrating on negotiating with the seller. How quickly that happens is different in every market. I want us to have that conversation while we still have choices.
You’re the one who sets the asking price and decides whether to accept an offer. My job is to research the numbers, know the market, and be willing to tell you what I think will help you make the most money.