Get Real: Is It Time for an Appraisal?

Posted by Beth Alois on February 29, 2012

One
of the most important jobs for your realtor is determining the value of your home.
Your realtor will develop a Comparable Market Analysis. By comparing your home
to similar homes on the market, as well as similar homes that have recently
sold, the CMA will suggest a reliable range in which to price your home.

If
your property isn’t attracting serious shoppers, your agent may recommend that
you hire an appraiser to get a second pricing opinion. The appraiser will come
in with an independent, unbiased opinion to help ensure your price is correct
for the market.

“An
appraisal is important in today’s market especially, because it’s an objective
and unbiased source of information,” said Michael H. Evans, president of Chico,
Calif.-based Evans Appraisal Service Inc. “The appraiser is an independent
professional who performs a service for a fee rather than for a commission and
is therefore not as invested as others are who are making pricing decisions.”

Appraisals allow
for homeowners and buyers to establish “fair market value.” In addition, an
appraisal allows a lender to know how much can safely be lent.

“Credible
opinions of value can help to stabilize the real estate market,” said Joseph C.
Magdziarz, president of Chicago-based Appraisal Institute, a global membership
association of professional real estate appraisers. “Appraisers today are doing
the same thorough, fact-based research and analysis they have always done.”

A
home appraiser will compare the condition of your house in relation to the
comparable properties in the neighborhood and will give you a reasonably good
idea where your house fits in relation to recent sales.

According
to Evans, a home appraisal can range in length from two pages to more than 100.
It will include details about the house, a description of the neighborhood and
side-by-side comparisons of similar properties. It will also contain an
evaluation of the area’s real estate market, notations of major problems with
the property that will affect its value and an estimate of the expected time it
will take to sell the property.

The
Appraisal Institute recently released several tips for consumers and guidance
for homeowners and buyers seeking to ensure their sales are completed in a
timely manner:
• Make sure the lender hires a qualified appraiser (such as a designated SRA,
SRPA or MAI member of the Appraisal Institute). The lowest-priced appraiser
does not necessarily equate with the most qualified. This is a time to get the
numbers right.
• Accompany the appraiser during the inspection of the property, if possible.
The more active you are in the process, the more you will understand it and
will be able to catch any errors.
• Request a copy of the appraisal report from the lender. Federal law requires
that you receive a copy of the appraisal within 30 days.

Remember,
you needn’t agree with the outcome of an appraisal. You and your agent can work
with the figures and determine if you should change the sale price or not. A
home appraisal, no matter how scientific, still ends up being the opinion of
the appraiser and to some degree is a judgment call.

*
Jim DeFrank and Beth Alois can be reached at 610-388-3700. Prudential Fox &
Roach isan independently owned and operated broker member
of BRER Affiliates Inc. Equal Housing Opportunity.