Profile picture for alveolus

Should I get a appraisal before listing my property?

I interviewed two agents for my listing. Each gave me extremely different opinions on the listing price (approx $70,000 difference on a townhome.) Unfortunately, there are no COMPARABLE units in the area that where recently sold.
Q.) Should I hire a private appraisal to set a reasonable listing price?
Q.) How can two "real estate professionals" be so off?
Any help is appreciated. Thanks.
  • January 22 2009 - Mount Laurel
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Answers (10)

Profile picture for cjfmonroe
why can't i locate my home?
  • February 04 2009
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Alveolus,
Don't apologize since the questions are not at all naive.  There are a few different "value" analysis that don't really relate to each other. Appraisal, assessment and "market value".
Appraisal looks at what happened within the last 6-9 months in sales.
Assessment is what the local government uses to calculate your taxes.
Market value is what a ready willing and able buyer will pay.

A $70K difference within CMA's is a lot.  One was probably leaning more towards what you wanted to hear than the other.  The appraiser probably had a hard time since you mentioned there are no recent comps.  Why no recent comps....either nothing has sold or nothing is listed. My guess nothing has sold.  Why haven't they sold? Probably price as compared to CURRENT (vs historical) market.

Suggestion: get a 3rd CMA then take an average.  That may be your best alternative.  Believe it or not the effect of overpricing can hurt you more then underpricing.  I've been involved, within the last 6 months in 2 multiple bid situations and this is in an area that has a 19 month supply. 1 went for MORE than asking and the other went for asking.  Buyers sense value and will help a seller that has under priced.  There is no help if your overprice since they won't be as interested.
www.housesofhunterdon.com
  • February 04 2009
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Profile picture for alveolus
Thanks for the helpful opinions.

Interestingly, I had my home appraised (by a certified appraiser) and she came out with a value that's higher than both the two agents whom I've spoken with. What to make of that?
Also, should I mention the official appraisal in my listing description?
Also, as a rule of thumb, is it wise to list the house below what it's been appraised at (considering the market) or should I start there and drop down if I don't get any interest in the property?

Sorry for the naive questions, it's my first go around with this ownership thing.
  • January 27 2009
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An appraisal can eliminate concerns of buyers as to whether the property can be financed which in the current market is a valuble benefit.  They still need to qualify but can be confident the property is at fair market value.
  • January 23 2009
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Profile picture for Esteban5
Hire an appraiser....$70K isn't pocket money.
  • January 23 2009
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alveolus,  Get the best, highly qualifed and most experienced appraiser you can find.

Today valuation is everthing.  

Real estate appraising takes sonme serious education, licensing plus expereince, often times sadly lacking in many real estate agents
.
Some agents attempt to 'snag" a listing  by offering  a fantasy price to the owner. In this market beware of  irrational optomism!

Hope this helps.
  • January 23 2009
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As a broker and appraiser, I'd suggest getting the appraisal.  Even though two appraiser can vary in price greatly as well.  But the appraisal should be more fine tuned than a BPO. And give you a unbiased opinion of value as they are not looking for a listing.   JT is right that your bank or buyers bank, may not use the appraisal, but the courts would. 

As a broker I would work with you to put the property on at a fair price, that said the higher the price the fewer buyers, the lower the price more buyers, higher price.  A house will always sell for its fair market value, depends on if you want to wait and see what its worth overtime, or put it on low, get lots of offers and sell it quickly.  Probably for more than asking.
  • January 23 2009
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Any appraisal you get and pay for, most likely can not and will not be used by the buyer's lender. So appraisers don't hold the answer to the qustion..."what's my house worth??"... NEXT BIG POINT When selecting a listing agent, Ask them to sign this statement/promise: "I promise not to ask you to reduce your price in the next 45 days after the listing date." Why you may ask? Truth is some agents quote a HIGHER LIST PRICE, because the know your house probably wont sell, and after 30 to 45 days they can get you to lower your price. THIS TACTIC will block other agents from getting the listing. I can refer you to a good agent in your area. contact me.
  • January 23 2009
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do not spend your money on an appraisal... do call a Realtor who works the area where your home is located and get a CMA... do not determine who you are going to work with only on the numbers... interview the agents and find one you connect with and listens to you and you can talk to! the numbers will bear out in the open market... you can not list to low but you can list to high and keep chasing the market down until it forecloses! food for thought..the number is subjective! always... but the buyer pool is reality... price it right and it will sell...
  • January 22 2009
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Profile picture for sunnyview
I would ask another agent for CMA. The truth is that valuing property is subjective to  large degree especially with no solid recent comps. Do not be tempted to go with the highest CMA. Some realtors with give a high CMA to get the listing and then ask for a price reduction about 3 weeks into the listing. In this market, that can kill your chances to sell. I would get another CMA and see where it lands. You are much better at a mid price point that at the high so try to find it somewhere in the 3 CMA's and then pick the realtor that you think will do the best job for you.
  • January 22 2009
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