Every agent knows a key element to selling a home quickly is having the buyer and seller be in general agreement on its true market value. But in today’s market, out-of-touch appraisers are having an undo influence on the sales process, with wild swings in valuations from appraisal to appraisal.
How can an agent get a house sold if the buyer and seller are confused about its worth?
There’s a reason that the best real estate agents are the ones who know their local area the best. They list homes at the right prices and know how to bring in offers at or around that number. But finding that sweet spot is getting harder and harder because of the wide gap between appraisals.
From a homeowner’s perspective, the varied appraisals can make it difficult to trust an agent and agree to a realistic estimate of how much their home is worth in their market. The New York Times recently ran a story pointing out the large discrepancies in appraisals and possible reasons why:
But don’t assume that the appraiser will return with a value for your house that you agree with. First, banks are increasingly bringing in appraisers from other towns, if not other states. While this is done to comply with provisions in the Dodd-Frank act aimed at establishing objectivity and preventing agents and mortgage brokers from influencing the outcome, it often produces results that fail to fully account for the central tenet of real estate: location.
Joseph C. Magdziarz, president of the Appraisal Institute and an appraiser outside of Chicago, defended his industry’s work but said many appraisers were now pressed to write their reports more quickly and for less money. In cities like Chicago, he said, local knowledge is crucial because prices can vary from block to block and also floor to floor in high-rises.
Even if the appraiser is local, Mr. Magdziarz advises people to review a copy of the report. “The appraiser who did my house talked about my fireplace, but I don’t have one and he got the size of the living area all wrong,” Mr. Magdziarz said.
How should agents handle these wide variations in home appraisals? What has your experience taught you? Please share with us.