What Sellers Need To Know About Appraisals

Here are three critical things you should know about appraisals.


What do you need to know about appraisals? An appraisal is an opinion of value, where an expert appraiser will come to your house and estimate how much it is worth. This can be a confusing topic, but it’s important to be informed because an appraisal could greatly affect the success and price point of your sale. That’s why I am sharing three things you should know about the topic.

First, do you need an appraisal before listing your home on the market? Appraisers represent the bank, and their goal is to confirm that the house can support the collateral for the buyer's loan. Unless you expect your property to appraise much higher, doing an appraisal before listing your property may not be beneficial. Moreover, the buyer usually covers the cost of the appraisal. If you, as a seller, pay for the appraisal before listing your home, you will be out of pocket, usually between $450 and $650.

"Unless you expect your property to appraise much higher, doing an appraisal before listing your property may not be beneficial."

Next, it is also essential to consider the appraisal gap. In the post-COVID era, buyers have offered much more than the listing price and had gap coverage to make up the difference between the sale price and the appraised price. This gap will start to shorten as the market corrects itself and the federal rates increase, causing volatility in the real estate market. As a seller, you should keep this in mind.

Lastly, you may be curious about how appraisers determine the value of your property. Appraisers look at the square footage, bedroom-bath ratio, year built, and similar properties sold in the market within the last 90 days or up to six months. However, due to recent changes in the market, appraisers may only go back 90 days.

These are some of the key things you should know about appraisals when preparing to list your home for sale. If you need assistance, you can always give us a call or send an email. We’re happy to help.

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