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Replies (12)
- hpvanc
- Contributions:2579
At the risk of sounding like a REA. I agree with Socal completely on this. I would also recommend a pre-inspection to prevent major surprises on that front as well.
- Kamil Andrukiewicz, "homesbykamil.com"
- Contributions:57
If you have a good Realtor, that CMA is valuable. Your mortgage lender will send out it's own appraiser to determine the appraisal of the home.
- Vince Curtis, "SoCal Appraiser"
- Contributions:4699
I agree with SCE - obviously since Im an appraiser, and there are some very good reasons why REAs should recommend one. 1- A seller getting an appraisal shows the REA that the seller is serious about a real value 2- relieves the REA from trying to sell themselves while trying to be honest about the CMA. 3- Lets the appraiser give the seller the bad news about declining home values these days. 4 Lets the listing REA use the appraisal as a selling tool once the property is listed for sale. 5- The REA gets a measured sketch out of the deal. 6- No appraiser is going to 'steal' the listing from a REA.
I do these all the time, and usually charge a little less since they dont have all the lender requirements attached to them. To be honest, many homeowners dont trust REA's when it comes to value. Many think - and rightly so - that REAs are invested in themselves getting that commission. IE in my neighborhood we have a husband/wife REA team that ALWAYS lowballs the value for a quick sale. Another team always values high just to get the listing, then locks them into a long listing period. We have a whole bunch of great agents in between but it is sometimes hard to know who is who.
If you are thinking of selling, consider getting an appraisal, but shop around for price - dont spend too much. Here is a link of all current appraisers in the country. Call two or more appraisers for a quote.
https://www.asc.gov/National-Registry/FindAnAppraiser.aspx
I do these all the time, and usually charge a little less since they dont have all the lender requirements attached to them. To be honest, many homeowners dont trust REA's when it comes to value. Many think - and rightly so - that REAs are invested in themselves getting that commission. IE in my neighborhood we have a husband/wife REA team that ALWAYS lowballs the value for a quick sale. Another team always values high just to get the listing, then locks them into a long listing period. We have a whole bunch of great agents in between but it is sometimes hard to know who is who.
If you are thinking of selling, consider getting an appraisal, but shop around for price - dont spend too much. Here is a link of all current appraisers in the country. Call two or more appraisers for a quote.
https://www.asc.gov/National-Registry/FindAnAppraiser.aspx
- SoCal_Engr
- Contributions:5666
@ Vince...
You bring up some points that I had not thought about. It is interesting to get the point-of-view from an appraiser - even given that this approach could be a boon to your industry.
@ Kamil...
Unfortunately, your response reinforces a perception that REAs don't comprehend written communication very well. If I am SELLING a house, then I wouldn't have a mortgage lender. And, the whole point is that the real value of a CMA is disputable, given that the buy-side REA will likely bring a CMA to the table to support their client's (the buyer) interest.
You bring up some points that I had not thought about. It is interesting to get the point-of-view from an appraiser - even given that this approach could be a boon to your industry.
@ Kamil...
Unfortunately, your response reinforces a perception that REAs don't comprehend written communication very well. If I am SELLING a house, then I wouldn't have a mortgage lender. And, the whole point is that the real value of a CMA is disputable, given that the buy-side REA will likely bring a CMA to the table to support their client's (the buyer) interest.
- Cory La Scala, "San Diego CA Realtor"
- Contributions:419
I agree with both of you, I think it's completely reasonable to think a seller would get an appraisal to find out the value of their home - but - remember, sellers often have had a number inside their heads for a long time, and will hire the agent who agrees with them (buys their listing.) That agent would never suggest a seller spend money out-of-pocket to give them what they could, a CMA. A seller would rather spend money on an inspection if sellers know it could save them a lot more money in the long run. It always about money, especially out-of-pocket money.
As for CMA's, it's only a good as the agent preparing it, same for appraisals. When I took Appraisal in college, the first thing we learned was to find out who the client is, so you can work the appraisal toward them. Seriously, on day one, from a San Diego appraiser. And, I saw what that meant when the market first changed. So, while the seller may get a nice number from 'their' appraiser, it may even make them even more inflexible when their buyer's appraisal comes in lower. It doesn't need to be a big difference either.
You can talk market and property condition all day long, many sellers don't care, the emotional attachment is greater than anything.
As for CMA's, it's only a good as the agent preparing it, same for appraisals. When I took Appraisal in college, the first thing we learned was to find out who the client is, so you can work the appraisal toward them. Seriously, on day one, from a San Diego appraiser. And, I saw what that meant when the market first changed. So, while the seller may get a nice number from 'their' appraiser, it may even make them even more inflexible when their buyer's appraisal comes in lower. It doesn't need to be a big difference either.
You can talk market and property condition all day long, many sellers don't care, the emotional attachment is greater than anything.
- sunnyview
- Contributions:25139
I think appraisers can be more independent that some CMA's, but that being said many CMA's that I have seen are solid. The problem comes seems to often creep in when the owner/seller doesn't really want to hear the real number that the comps will bear.
Also, many owners do not understand the shelf life of an appraisal which is only a few months at most and possibly shorter than that in a rapidly changing market. Some owners do not realize this and point to an appraisal done 6 months to 5 years ago as a way to value their home today.
Most agents are honest, but for the owner who wants another opinion, I think an appraisal might be a good way to go.
Also, many owners do not understand the shelf life of an appraisal which is only a few months at most and possibly shorter than that in a rapidly changing market. Some owners do not realize this and point to an appraisal done 6 months to 5 years ago as a way to value their home today.
Most agents are honest, but for the owner who wants another opinion, I think an appraisal might be a good way to go.
- Nancy Sullivan, "nansully"
- Contributions:77
I think an appraisal is a good idea - if the seller doesn't mind spending several hundred dollars or if it's the sellers idea at the outset.
As agents, it's our job to know the values of properties in our market. That being said, we've seen appraisals all over the map in my market. Some on mark, some so far off it's laughable. The true market value of any home - we agents all know - is what someone is willing to pay for it.
I personally and know other agents in my market who personally dug our heels in (with our sellers blessing of course) at a low appraisal. Look, if you have a property that has great interest and your seller accepts an offer for a price, that's the market value. If the appraisal comes in lower than the agreed upon price, the seller in NO WAY has to renegotiate. If the buyer wants the house, the price is the price. If he doesn't want it, he is free to walk away.
So many of the appraisals are driven by comps of homes that aren't in the same value neighborhood, including short sales and foreclosures.
Preparing my sellers for what the appraisal could be (low) is part of my routine. Disclosing in the MLS that the property won't appraise to list (so your buyers better have 20% down) is a good way to let other agents know that your sellers aren't interested in renegotiating after the deal is reached.
So I don't 'recommend' an appraisal to my sellers. I'd rather they spend their money on paint and landscaping before we go to market.
As agents, it's our job to know the values of properties in our market. That being said, we've seen appraisals all over the map in my market. Some on mark, some so far off it's laughable. The true market value of any home - we agents all know - is what someone is willing to pay for it.
I personally and know other agents in my market who personally dug our heels in (with our sellers blessing of course) at a low appraisal. Look, if you have a property that has great interest and your seller accepts an offer for a price, that's the market value. If the appraisal comes in lower than the agreed upon price, the seller in NO WAY has to renegotiate. If the buyer wants the house, the price is the price. If he doesn't want it, he is free to walk away.
So many of the appraisals are driven by comps of homes that aren't in the same value neighborhood, including short sales and foreclosures.
Preparing my sellers for what the appraisal could be (low) is part of my routine. Disclosing in the MLS that the property won't appraise to list (so your buyers better have 20% down) is a good way to let other agents know that your sellers aren't interested in renegotiating after the deal is reached.
So I don't 'recommend' an appraisal to my sellers. I'd rather they spend their money on paint and landscaping before we go to market.
- Stephanie McCarty, "snellvilleagent"
- Contributions:521
because sellers don't want to spend the money but they don't believe the agents CMA either so they want to test the market at someone else's expense. I have explained to sellers time and time again that the information source for appraisers is the same that a good agent will use in preparing a CMA.
I think there are many sellers who would love to have a certified appraisal but few willing to pay for it.
I think there are many sellers who would love to have a certified appraisal but few willing to pay for it.
- Bradley Slavens, "Slavens Realty"
- Contributions:14
An appraisal is a good starting point however the real value is simply what a buyer is willing to pay. The biggest risk to sellers is over pricing. Especially in an unstable market. When your over priced you don't get any offers and lose confidence which puts you in a weak negotiating position. If you under price you can generate multiple offers and the buyers will feel safe going hither to "win" the property and may be less likely to fall out of escrow knowing other buyers are waiting to pounce. Caution though if you only get one ready willing and able buyer at your list price you will have to take it or pay the commission.
- Simon Mills, "Mills Realty"
- Contributions:1858
Although many CMA done by professional Realtors are a very good tool having an appraisal done does take out the hesitation a seller might have that an agent puffed the amount in order to get the listing. An appraiser is truly independent and is being paid for their service. Once the appraisal is done they have no other sales motivation. As an active broker I would be happy to have a client do an appraisal and then set the price accordingly.
- SoCal_Engr
- Contributions:5666
"I think it's completely reasonable to think a seller would get an appraisal to find out the value of their home - but - remember, sellers often have had a number inside their heads for a long time, and will hire the agent who agrees with them (buys their listing.) "
This is pretty much my point. As an owner, I can pretty consistently count on the REA leaving out low comps to give me a "favorable" CMA - trying to buy the listing. To me this legitimately brings into question the real-world value of the CMA. Realistically, I consider a CMA to be a locale-specific guestimate - potentially colored by the objectives of the REA. This makes the generic CMA marginally more reliable than a Zestimate (a bit of hypebole never hurts?), but I'd never make a decision off of just one.
This is pretty much my point. As an owner, I can pretty consistently count on the REA leaving out low comps to give me a "favorable" CMA - trying to buy the listing. To me this legitimately brings into question the real-world value of the CMA. Realistically, I consider a CMA to be a locale-specific guestimate - potentially colored by the objectives of the REA. This makes the generic CMA marginally more reliable than a Zestimate (a bit of hypebole never hurts?), but I'd never make a decision off of just one.
- Dunes....
- Contributions:3894
Here's the Opinions of a Good number of Realtors discussing CMAs at ActiveRain
CMA's for Leads
Using Sold Listings As Comparable's Just Doesn't Cut It Anymore
The difference between a CMA and a Fee Appraisal, and another reason correct pricing saves heartache
CMA's for Leads
Using Sold Listings As Comparable's Just Doesn't Cut It Anymore
The difference between a CMA and a Fee Appraisal, and another reason correct pricing saves heartache
If you're serious about selling, why not get an appraisal to set the value?
If you're serious about selling your house, it is going to have to be appraised - though paid for by the buyer. However, at a minimum, you as the seller will need to be prepared to defend/justify your price.
CMAs are nice, but they are not as authoritative as an actual appraisal. Some are even biased (intentionally or otherwise) by REAs who have a vested interest in the number that they generate. And, even after an offer is made/accepted, everyone is still waiting to make sure the house appraises.
So, why not just pay a few bucks up front for an appraisal and be done with it? No wondering if the CMA is going to be supported by an actual appraisal, more authoritative backing to your price (especially against a buy-side CMA), etc.
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