Pricing Your Home & Understanding Appraisals
At Lindekugel & Associates, we conduct a Comparative Market Analysis (CMA) prior to listing your home for sale. We do this to set realistic expectations for you. We also want to avoid disappointment after acceptance of an offer in case the buyer’s appraisal comes back lower than you hoped it would.
If the “As Is” condition of your home won’t sell or appraise for the price your neighbors’ house sold for, we let you know up front. If it will sell for more, we’ll tell you that too. You’ll get an“As Is” sales price and an “If Repaired / Updated” sales price. We can provide you a list of recommended repairs and/or upgrades that will improve your homes current market value. We can also provide a list of contractors that can provide estimates so you can decide how to proceed. The process we use to conduct a CMA is much like an appraisal. We analyze recent comparable sales near your home and compare condition, upgrades, size and amenities like an appraiser will.
An appraisal is a process that supports a realistic value of a property against which a borrower would like to borrow money. Since the real estate bubble burst in 2008, appraisals are more conservative and are drawing more attention from lenders as part of the approval process. To establish the value of a property, licensed appraisers start with an interior and exterior inspection of the property. They then look at recent sales of similar homes, called comparables, or comps. These comparables (a minimum of three) are ideally located within a one-mile radius of what is called the Subject Property and have sold within the previous few months. Depending on the availability of such comparables, it may be necessary for an appraiser to go outside this radius, especially in rural areas or for custom or unique homes. Examples of this might be homes on over sized lots or with specific use amenities such as horse corrals or workshops. Since every home is different from every other, the appraiser will give adjustments to each comparable. These adjustments will account for differences such as updated kitchens & bathrooms, the number of bathrooms, pools, patios, landscaping and square footage in otherwise very similar properties. One thing to remember when selling your home is “Top Of The Market Price, Equals Top Of The Market Condition” inside and out.