Pre-listing appraisals are a waste of money; they benefit the real estate agent, not the home seller. They provide agents with an "out"; by not suggesting a list price the agent has the ability to say "I would have listed it at $X so don't blame me"! So unless your home is in an area that doesn't see much activity or is significantly different (better) than everything else, make your agent commit to a price and make them demonstrate support for that opinion. You will be shocked to learn how little agents know about the valuation an appraisal process. So if it's suggested to you, question why because in most cases you do not need to get a pre-listing appraisal.
A pre-listing appraisal WILL NOT:
- ensure that the sale price is the appraised value
- convince a buyer the home "is worth it"
- convince another appraiser that the home "is worth it". There are MAJOR differences between purchase appraisals and all others - mainly underwriting guidelines
- be used in the sale. Your appraisal is not going to be used by the buyer, their lender will order one from a disinterested third party
- necessarily reflect the current market. Appraisers used closed sales as a base of value, the current market is actives and pendings. While considered, they are less relied upon
- be even remotely applicable after about 3-4 months in an active market due to changing conditions
A pre-listing appraisal WILL
- give you an impartial opinion of value - likely broad, but an opinion none the less
- cost you around $400
- allow your real estate agent an opportunity to avoid suggesting a list price
- save your real estate agent the work or embarrassment of telling you they have no idea how to comp the home like an appraiser
- give you a sketch and accurate GLA of the home
While an agent isn't expected to mine data as an appraiser, they are expected to have a solid working knowledge of the process. Unfortunately the insanely low bar to entry in the real estate sale industry means the majority of agents have no idea what appraisers do or how they work. It's easier to pass that responsibility on to someone else at the seller's cost. There are times when hiring an appraiser as a consultant during a listing is a good idea; much the same way an expert witness is used. However, most sellers don't require that and the very best thing to do if and when an agent suggests a pre-listing appraisal is to ask why? Why can't you given me an idea in much the same way an appraiser can? Still suggesting it? Then suggest that the agent cover the cost.
THE HANK MILLER TEAM COUNSELS HOME BUYERS AND SELLERS IN THE ATLANTA AREA WITH OVER 25 YEARS OF SALES AND APPRAISAL EXPERIENCE.
