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Pre-Listing Appraisals are Typically a Waste of Money

Written by Posted On Sunday, 12 January 2014 06:52

Does having a home “pre-appraised” make a difference? Is this money well spent by the average seller? Do buyers and buyer agents care; or are pre-listing appraisals not considered credible? In most cases, pre-listring appraisals are a waste of money for sellers and a crutch for agents.

Will a seller provided appraisal be accepted as “impartial” by a buyer?  A few things immediately come to mind when a seller provide appraisal is pushed front and center:

  • What is the relationship of the agent to the appraiser? Seller to the appraiser?
  • What was the stated purpose of the appraisal?
  • What is the background of the appraiser?
  • When was the appraisal completed and what are the trends in the area?
  • Who paid the appraiser?
  • Was the appraisal completed as an underwriter would expect?
It’s interesting how frequently pre-listing appraisals are above list price; agents love to say things like “appraised at 450K and reduced to 380K”. It’s reduced because the market (buyers) sees the appraised value as unrealistic.  Agents trumpeting that a home appraised higher than list price is idiotic as only the market indicates value. There isn’t an appraiser on earth that can pin point what a home might sell for when listed, at best they can offer a value range. But shouldn’t this be something that a competent agent can do as well?

Are agents bringing in appraisers as a crutch; perhaps they don’t want to offend a seller and lose a listing? In the so called “recovering” market are listing agents afraid to level with buyers that are convinced values have increased when they might not have? Clearly there are times to bring an appraiser in but those are when the home is truly unique or listing agent is genuinely stymied – and that should be infrequent.

Buyers don’t want to be told what to think based upon something provided by the seller, especially something that is an opinion. The use of appraisers as consultants during the selling process is seen in areas; working with sellers and agents to establish a list price, pricing strategies while listed and preparing an info packet for the buyer’s appraiser. This is probably a better role and one that can be helpful throughout the selling process.

Buyers and lenders want “their experts” to offer opinions, not the seller’s. Sellers can save money by getting their homes in top shape and by using experienced agents that can look at the data like an appraiser. If required, bring in experts and use them as the situation dictates. IF is the operative word. Shoving something in the face of buyer and telling them what to think doesn’t typically work.

- See more at: http://hankmillerteam.com/2014/01/08/should-sellers-get-a-prelisting-appraisal/#sthash.vz1OhqjM.dpuf

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Hank Miller, SRA

Hank Miller is an Associate Broker & Certified Appraiser in the north metro Atlanta area. Since 1989, real estate has been his full time profession. Hank´s clients benefit from his appraisal and sales experience; they act upon data, not baseless opinions. He is an outspoken critic of the lax standards in the agent community.

Hank remains an active certified appraiser and completes specialty work for FNMA, lenders and attorneys. He is a well-known blogger and continues to guest write for multiple industry publications as well as national outlets like the WSJ, NYT, RE Magazine, USA Today and others. He is a regular on public Q&A sites on Zillow, Trulia and many others.

Hank consistently ranks in the top 1% of all agents in the metro Atlanta area. He runs the Hank Miller Team and is known as much for his ability as he is for his opinions. He is especially outspoken about the lack of professional standards and expectations in the real estate industry.


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