Recently I was preparing a market analysis for a home where I could not find any good comparables. I was told by the owner that it had some historical significance and they had some documentation. I hadn't seen the home yet but could tell in the initial conversation with one of the owners that they working toward preserving it and had a lot of emotional investment in the home. After many attempts from various angles I happened to mention to a fellow agent in my office the difficulty. She suggested that I call an appraiser to get a value price check and referred someone to me. I had never heard of this - probably because I had never needed it before.
As a result of another post regarding pricing adjustments, it was suggested that I talk to an appraiser to find out what they adjust for finished/unfinished basements; 1car/2 car garage etc. in my area. It so happened that I had an appraisal coming up and he allowed me to follow him around. It was very helpful and so I called him for a value price check. He referred me to an appraiser in the area of this home and I was able to get some comps to show my clients. Once I was at the home, I could tell that they thought it was worth more than the market would probably support and that they might break even at best (only owned it for a few years). So I suggested they have a full appraisal done on the home and they agreed.
Also, I have been sent promotions recently by home inspection companies that do a preliminary inspection at a lower cost for a seller with the idea that the buyer will choose them to do a full inspection when the time comes with a cost savings to the buyer. I can't remember exactly how it works but something to that effect. I saw a program on real estate last night where the realtor suggested a full inspection to the seller because they saw evidence of some issues that might need repair and wanted the seller to deal with them sooner than later.
The point of all this, I am wondering how many realtors are using these avenues with the seller before they list the home or find a need for it. The appraiser that I followed to gain some knowledge about adjustments ended up calling me as he was having a little difficulty supporting my sale price. It was a great home and not over priced so I was really surprised by this. It ended up appraising about $2,000 over sale price but about a year ago it would have been a lot more.
Cathy, good job on following the appraiser around and learning. It's hard for anyone in MI to make money on a home they have only owned since 2002 and above.
My assistant, did a pre-inspection on her home before she listed. They found mold in the attic, she had it removed and then it didn't hinder the sale. So I think it is a good idea. All houses that go to relocation companies have them inspected so YES, it can be helpful.
Peter:
I agree about an inspector working for both the seller and buyer. I will have to look up the promotion because I know it was something to entice the seller and at a lower cost. I showed a home that had mold issues and the seller had an inspection, fixed everything and had it inspected again--and shared all this with the prospective buyers. Since it was handled that way, it put everyone's mind somewhat at ease. However, I told them they still wanted their own inspection since that inspector was working for the sellers.
There are times when a pre-appraisal makes sense - especially a unique home, such as an historical one or highly customized home. It helps everyone, from the homeowner to prospective homebuyers and the professionals in the transaction. In most cases, however, it adds nothing to the transaction.
Again, with home inspections... there are times when a pre-inspection makes sense, such as a much older home, or one with sereious damage. With your average subdivision house with normal wear and tear, I don't think it adds anything to the transaction.
Thanks Missy:
This couple with the older home were referred to me by my someone in my neice's office who is a realtor in the Kalamazoo area. There was a connection immediately with them and I so wanted to tell them good news. On the phone, it sounded like they had done so much work and had established themselves there. Actually this was their first home and they had done good work in fixing up what they could in the short time they had lived there. So, it was hard to tell them that they would be lucky to break even--not having owned it long enough. I think the appraisal is going to support this and took some of the pressure off me. I love this profession - something new every day and I keep understanding more and more what a huge responsibility it is to be a Realtor and in pricing things correctly--the most important thing we do.
We don't normally do appraisals ahead of time because we have so many VA loans you don't know if you will get a VA buyer or a conventional buyer.
Not sure why a home inspector doing an inspection for a seller wouldn't be able to do it for the buyer but I would want a different pair of eyes doing it anyways.
Thanks Greg:
I probably wouldn't have a seller do an appraisal unless it was really hard to find comparables like this one but it was a new tool I did not have to call upon before this happened. I saw that it is important to have a good relationship with an appraiser so I might get a value price check when needed. He was referred to me and didn't know me but quickly did some comps for me and then, of course, I recommened my sellers call him when they agreed to the appraisal. That's how I do business also--help anyone I can and it just comes back it different ways. Being generous is always a good thing.
Keep in mind that the appraisal you are getting ahead of time is only that persons opinion of the price of the home and may not be the person that actually does an appraisal. Been burned that way before.