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See how real estate appraisers will determine the homes they appraise. Learn all of the impactful factors in house appraisals. 
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Scoop.it!
Do you know the appraisal myths too many sellers believe? Separate fact from fiction with the appraisal truths for buyers and sellers.
Bill Gassett's insight:
Having been in the real estate business for nearly thirty years, I see people making mistakes all the time. One of the more common mistakes that both buyers and sellers make is not understand different types of real estate values.
Quite often people use different terms and interchange them like they have the same meaning. Unfortunately, they do not.
I like to call these appraisal myths. For example, so many sellers think that assessed value, market value, appraised value and even a Zillow value are the same thing.
This could not be further from the truth. In fact these values are quite often VERY different from one another.
The assessed value of course is what the city of town uses as a basis for collecting taxes.
The market value is generally considered what a buyer and seller agree is a fair price - a meeting of the minds so to speak.
An appraised value is done by a professional appraiser who uses a certain method of calculating value either by using comparable sales approach or income approach (valuation methods).
A Zillow value is an algorithm that guesses at home value and is often considered one big joke by the the real estate industry.
Using these real estate terms interchangeably is just one real estate appraisal myth. In the article at Maximum Real Estate Exposure you will see five other examples of common appraisal myths.
Take a look at the article and if you enjoy the appraisal tips give it a Scoop or share it on your social media channels.
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Birmingham, AL real estate appraiser Tom Horn shares some appraisal tips with agents to help the loan closing go smoother.
Bill Gassett's insight:
God knows that putting a price tag on a home is not always easy. There are some real estate agents, however, who take it to the extreme in not knowing how to put a price tag to a home.
Clearly pricing a home correctly from the outset is one of the most important things you can do for a seller client. Pricing correctly is a skill more Realtors should spend time mastering.
Tom Horn a well know appraiser has put together a great article sharing some excellent advice on appraisals for real estate agents.
Tom and I are often on the same page and that certainly holds true when it comes to using price per square foot as an accurate measuring stick of a homes value. This is just about the worst way you can price a home other than a Zillow estimate.
We both have written articles on both of these topics on a few occasions. In Tom's latest article he provides a refresher on both.
In his latest piece Tom comes right out and says "don't blame the appraiser" when your value doesn't come in where you want it to be.
Just because a buyer decides they want to overpay for a property doesn't mean this is the real value of a home.
Take a look at the article and see four more salient points about home appraisals that all real estate agents should be cognizant about.
If you find the appraisal advice to be helpful, give it a share or Scoop it!
Larry Matthews's curator insight,
January 25, 2017 4:38 AM
#novascotiarealestate www.larrymatthews.com
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Birmingham, AL real estate appraiser Tom Horn discusses 5 red flags during a home appraisal that agents should try to avoid.
Bill Gassett's insight:
Putting a value on a home is a skill and an art. There are some real estate agents that are good at it and other frankly who suck! Why do you think there are so many price reductions on a daily basis? It means one thing - the home was not priced properly from day one.
The best real estate agents do not have many price reductions. From a sellers stand point one of the reasons you hire an agent it to accurately price a home. This is a major function of a real estate agent.
In his latest article Tom Horn explains some of the problems that occur from his side of the ledger trying to appraise a property in which the comps do not justify the price put together by either the real estate agent or the seller. When I say the seller this is another way of saying the agent was a "yes man or woman" and just went along with the sellers price. Oftentimes a very big mistake!
Tom shows in his article 5 of the top things that cause an immediate red flag when he is appraising a home. Some of these include:
1.) A large jump in sales price in a short period of time. 2.) The contract price is way above sale prices in the neighborhood. 3.) The subject home is way overbuilt for the neighborhood. 4.) The comps provided are outside of the neighborhood when there are good comps to use in the neighborhood. Talk about the blind thinking they are leading the blind! 5.) Agent is using incorrect gross living area amounts.
Folks good real estate agents do not make these kind of mistakes. The problem is for every good real estate agent there are four lousy ones. The barriers of entry are far too low and cause anyone with a pulse to get into the industry.
Real Estate agents should be better trained when it comes to pricing homes correctly!
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Understanding what a real estate appraiser looks for during an appraisal can help you prepare for this required part of selling a home.
Bill Gassett's insight:
One of the important phases of a real estate transaction is the real estate appraisal. The lender who is providing the buyer a mortgage will send out an appraiser to your home in order to make sure they amount of money they are lending corresponds with the market value of the property. An independent appraiser will be assigned to visit your home and report back to the bank what the value of the home happens to be. The value of your home needs to be there otherwise the transaction more than likely will not proceed. This makes it important for you to understand what the appraiser is looking for and make your property look it's best. If you are in the unfortunate position of your home not appraising you will want to know how to challenge a low real estate appraisal. If you don't feel the appraiser is accurate in the assessment of your properties value there are steps you can take to hopefully resolve this situation. Take a look and if you think the article is a good one please consider sharing it!
Bill Gassett's comment,
August 4, 2014 9:31 PM
Thanks for sharing my article on real estate appraisals Tyler!
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See how to prepare for a real estate appraisal. Preparing for an appraisers arrival is a key part of having your appraisal turn out the way you want it too.
Bill Gassett's insight:
When you are selling a home you can expect the buyer's lender to do an appraisal on your property. The appraiser is a huge milestone to get past when you are selling a house. If you don't have a successful appraisal, the buyer will not get their loan and won't be able to buy your home.
For this reason it is essential to prepare for the buyer's appraisal. In the article at Maximum Real Estate Exposure, you will see some of the best tips for being prepared for the lenders appraiser.
By following the tips you will dramatically increase the odds that the appraisal process will not only go smoothly but that your home will appraise.
When your house does not appraise, you will be fighting an uphill battle for the sale to continue.
A couple days of your time and energy will go a long way to having an appraisal that works for everyone.
Scoop.it!
Birmingham, AL real estate appraiser Tom Horn provides solutions to common appraisal mistakes new agents make.
Bill Gassett's insight:
For quite a long time I have been expounding on the importance of pricing your home correctly. There is nothing that will stop a home sale dead in its tracks than being overpriced.
Unfortunately, getting the price right is as much of an art as it is a science. In his latest article, Tom Horn discuss ten appraisal mistakes new agents make and how to avoid them.
The first on Tom's list really resonates with me because I see it all the time - letting the seller dictate the price. One of the reasons why this happens is real estate agents inherently don't want to lose the opportunity to list a home.
The thinking is that if they don't agree to take the listing at the sellers price, someone else will. In many cases this is true, however, that doesn't mean it is a wise decision to take an overpricing listing. It isn't!
The second on Tom's list is using price per square foot to calculate value. Using price per square foot will cause one thing - the wrong price. It is an archaic means of arriving at value as there are far more things at play than the size of the home.
For example. price per square foot does not take into account location, the lot and a host of other variables that are important in calculating home values.
These are just two of the appraisal mistakes Tom discusses. Take a look at all of the others and if you find the information valuable give it a share!
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How to challenge a low real estate appraisal on my home is a question many sellers ask. See how to fight a low appraisal when selling a home.
Bill Gassett's insight:
When a buyer goes to purchase a home more often than not they will take out a mortgage. When doing so the bank that is lending the money wants to ensure that it is a good investment.
They do not want to be lending money on an asset that is worth less than the purchase price. While it is does not happen often there are times when the appraisal comes in less than the purchase price.
Appraisals are done by independent certified appraisers hired by the lender. When an appraisal does come in low there are a lot of sad faces - none more than the seller.
When a home does not appraise the borrower is not going to get the loan unless something changes. This is when real estate agents must know how to dispute a low real estate appraisal. Going about fighting a low real estate appraisal is not easy but it can be done.
In the article referenced above you will see a detailed explanation of how to go about disputing a low real estate appraisal.
Keep one thing in mind - it is possible that the appraiser is right and the home has been sold for more than it is worth.
When you know this is not the case and the appraisal has come in low for reasons unknown the first step is getting ahold of the appraisal to find out why.
The article takes you through step by step on how to challenge the appraisal from there.
If you are stuck in this situation you can use these tips to fight the appraisal and potentially end up getting your value adjusted.
Take a look and if you enjoy the article, please consider sharing it socially.
Bill Gassett's comment,
January 28, 2017 8:31 AM
Thanks for sharing @Austin Fernald - Home Appraiser
Austin Fernald - Home Appraiser's comment,
January 28, 2017 9:11 AM
no problem! Great article! @Bill Gassett
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Birmingham, AL real estate appraiser puts together a new real estate agent appraisal resource guide to help guide them through the complexities of the appraisal process.
Bill Gassett's insight:
When you are a new real estate agent there is a lot you need to know. One topic that every Realtor should be intimately familiar with is how to value homes properly. Part of this process is understanding how appraisals work. Once you have been in the business for a decent amount of time you realize just how important the appraisal is to the overall success of your transaction. If the home you are involved with does not appraisal the sale could be in jeopardy. Nobody wants this! As a real estate agent you need to be darn certain you understand the appraisal process from top to bottom. @Tom Horn-Real Estate Appraiser has done an exceptional job putting together this handy guide that should answer a great many questions about the appraisal process. This is good information whether you are a new agent or a veteran alike. Take a look at the excellent appraisal guide!
Scoop.it!
Low appraisals can be caused by many things. If there are errors in the appraisal report here are 5 place to look.
Bill Gassett's insight:
One of the things that takes place when someone buys a home and is getting a mortgage is an appraisal on the property. The lender giving the loan to establish that the value of the property is acceptable given the fact they will be lending money. The appraisal becomes an integral part of the transaction. When a property does not appraise often times the sale will fall apart. Just like any other business there can be human errors in appraisals. This of course can affect the bottom line. When the appraisal is impacted in a negative way because of incorrect information it can potentially cause a home sale fall apart when it really shouldn't. Take a look at the excellent article that shows us where the common appraisal errors occur.
Bill Gassett's comment,
March 19, 2014 1:14 PM
Thanks for sharing John - I thought Tom did a very nice job with his article!
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A real estate appraiser plays a crucial role in determining the market value of a property. Market value is the estimated price a property would sell in the current market conditions. Appraisers use methods and factors to arrive at an accurate valuation.
One of the primary methods used by appraisers is the sales comparison approach. This involves comparing the subject property with recently sold properties in the same area similar in size, condition, age, and location.
By analyzing the sales prices of these comparable properties, the appraiser can make adjustments based on any differences to determine an estimated value for the subject property.
Another method commonly employed is the cost approach. This approach involves evaluating the cost of construction and the value of the land to estimate the replacement cost of the property. The appraiser considers depreciation, improvements, and market conditions to arrive at a value.
This method is beneficial for new or unique properties with limited comparable sales data.
The income approach is often used for properties that generate income, such as rental properties or commercial buildings.
Appraisers calculate the value based on the property's potential income and expenses.
They consider rental, vacancy, operating expenses, and capitalization rates to determine the property's income potential and resulting value.
In addition to these methods, appraisers consider various factors influencing market value. These factors include the property's location, size, condition, amenities, and recent renovations or upgrades.
Economic factors such as supply and demand in the local market, interest rates, and economic trends also play a part in the valuation process.
A real estate appraiser employs a comprehensive approach to determine market value. By analyzing comparable sales, considering the cost of construction, evaluating income potential, and considering various property and economic factors, they provide a reliable estimate of a property's worth in the current market conditions.