Posted by: Daryl & Wendy Ashby | June 27, 2010

Appraisal’s

We as Realtors are often asked to provide homeowners with an appraised value of their home, when in fact all we are certified to do is provide a “market evaluation”.

While the results may end up being one and the same, the appraisal comes at a cost, while the market evaluation is generally provided as a courtesy in hopes of someday gaining an income from the relationship.

The principal difference between the two is the underlying reality that an appraisal can be taken to the bank, used as evidence of value in a court of law and therefore generally relied upon, while the evaluation is considered nothing more than an educated guess.

There are times when an evaluation will suffice, but there are also times when a formal appraisal is definitely the route to go.

If you are intending to put your home on the market, whether it be with a Realtor or as a private listing, an appraisal is highly recommended. It will remove all doubt as to the abilities or intent of the Realtor in performing the evaluation correctly, and it is fair to say every Realtor has their own means of coming up with the answer.

We generally take a multi-faceted approach, creating at least four analytical summaries, from a simple extraction and averaging of the MLS data base, to adjusting each sold retrieved as a comparable to reflect the actual square footage, number of bathrooms, kitchens, fireplaces, etc that exists within the home under study. This is the approach is primarily the one relied upon by the Appraiser.

Having said that, the Appraiser will limit the number of factors considered within their adjustment, while we open the door to anything and everything; inclusive of the hot tub, all of which could alter the value of the sold used as a comparison to better represent your home.

 The Appraiser will also select 4 or 5 homes that are close comparisons, while we leave the ledger open again and will utilize up to 20 homes should so many be available. Our thinking is one of reducing error that may be contingent within a single or few comparables and we feel the averaging is fine tuned by this method.

As you can imagine, errors can be inherent with those homes sold to out-of-town buyers who are not privy to historic values of a given community or may not have received all the information they deserved from their real estate representative. Hence they may have paid more than “market value”. This will spike the averages we or the appraiser see at the end of our analysis.

True too is the possibility that one of the sales used in comparison, may have been a desperation sale or a military sale where the government guarantees “no loss” to their personal.

Being that tax time is foremost on our minds, a licensed appraiser should be your first stop when it comes to challenging your ever rising tax assessment. Simply looking on the web and coming up with your own opinion of actual values will prove insufficient to sway the review board. An appraisal is hard to argue.

Other cases where an appraisal will prove beneficial is in dealing with an estate, liquidation, divorce or refinancing.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: