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What Are Appraisals Supposed to Reflect?

When an appraiser gives a valuation to a house is the valuation supposed to reflect what the house will sell for or something else?

 

One reson I ask is because I just took my house off the market, I was asking $199,500. Zillow had my estimate at $205,000 before the big update and now it shows that it is $226,500. Both of these prices are higer than what I was asking for... but I never even got an offer on my house.

 

If I hired an appraiser would/should the valuation reflect the current market conditions?

  • January 10 2008 - US
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Answers (8)

Unfortunately an appraised value is an opinion based on recent sales in your neighborhood.  The appraisal should take into account not only the market conditions but also the property condition. 

 

I would not use the zillow estimate as a basis for really anything as I have seen it wrong by more than 30-40,000 in both direction.

  • January 10 2008
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So apprasials aren't really 'priced to sell?'

  • January 10 2008
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nope

  • January 10 2008
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The appraisal will take into account current market conditions, that's why no one bit on your home. I believe if you pay for an appraisal, your home would probably appraise closer to 170,000 or 180,000. Think about it, if someone was interested in your home they would do the same thing to determine the value of the home. If 199,000 is what you thought was fair price for your home, then a potential buyer probably did their homework and discovered the home is over priced regardless of what homes  are actually selling for in your area. It may be a good investment to see what your home is actually worth and then you can make a better decision toward selling your home and pay down the balance of the home and sell at a later date.

  • January 10 2008
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Appraisals are suppose to reflect market value.  Here is the official definition of market value:

 

"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.  Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and sellers are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

  • January 11 2008
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Profile picture for drwloans

I am missing too much info on your property to reasonably assesed why it did not sell. But the basic rule of thumb is, "everything if priced correctly will sell". Take a drive through your neighbor hood and call up the other property owners with properties for sale. See what they are asking. Unless you are living in a ghost town with everyone leaving....... your property was not priced correctly.  Appraisers do not sell houses and that is your basic problem, you are relying too much on other data to sell your home quickly. You can contact me directly at, drwloans@yahoo.com, if my response from this site is delayed.

  • January 13 2008
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The question was not why the house didn't sell!

 

The question was....

 

"When an appraiser gives a valuation to a house is the valuation supposed to reflect what the house will sell for or something else?"

 

Are you a politician by chance and rather than answer the question that was asked you talk about related info and add I can help change that!

  • January 13 2008
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appraisal: a very scientific method of taking a wild ass guess.

  • January 13 2008
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