The Top 6 Reasons You Need a Pre-Appraisal
When you’re looking into selling your home, finding the right price can be the most important factor. Get the most for your home with a pre-appraisal.
When you’re looking into selling your home, finding the right price can be the most important factor. If you price it too low, you’re missing out on thousands of dollars. But, if you price it too high, buyers and their agents will think you’re not serious about selling — and pass right on by.
That’s why I include a pre-appraisal with every home I estimate to sell for $500,000 or more. Handing a copy of a pre-appraisal to qualified, interested buyers will not only communicate that you’re serious, it will increase their confidence in you and their potential home. The benefits and strategies behind a pre-appraisal are endless, but I’ve outlined my primary reasons below.
1. Receive an unbiased, third-party opinion of the market value of your home by a trained professional.
Getting a professional appraisal of your home will let you know exactly what to expect when you put it up for sale. You can trust that there’s no realtor suggesting prices that are arbitrary, unrealistic, or in his best interest. You’ll be able to list your home with confidence, assured in the knowledge that you’re going to sell for what your home is actually worth (and maybe a little more!).
2. Efficiently recognize and respond to a market offer.
With a pre-appraisal in your arsenal, you’ll know instantly how to respond to any buyer’s offer. You’ll have the documentation to prove that they’re low-balling you, that it’s fair, or that you’re unlikely to get a better offer. This efficiency means less time trying to sell your old house and more time to focus on building your life in your new home.
3. Effectively challenge a low lender’s appraisal of your home, maintaining your higher contract price.
Whether you’re buying or selling a home, knowing the appraisal value of the home in question is essential when it comes to lenders. When applying for a home loan, mortgage lenders will have someone appraise the house. Too often, that appraisal comes back low so that they won’t have to loan as much money. Knowing the unbiased, actual price of the home (and having documentation to back it up) will allow you to challenge the lender and ensure you get the right amount of money.
4. Ease the minds of potential buyers.There are the good surprises: birthday parties, someone else cooking dinner at the end of a long day, twins (that one could go either way). And, there are bad surprises: learning your dog isn’t quite as potty-trained as you thought, finding Legos with your feet in the middle of the night, and unforeseen issues with your new home. No one likes bad surprises.
Getting a pre-appraisal (and inspection, for that matter) gives buyers the confidence that their potential dream home won’t turn out to be a lemon. It also saves the buyer the money and burden of having to do it themselves — a huge selling point for your home when you list it.
5. Receive more offers at higher bids.As mentioned above, getting a pre-appraisal is a strong selling point. The buyer feels he knows what he’s getting, and it makes you seem more honest as a seller. Because the buyer feels you can’t be dishonest with a third-party pre-appraisal to back your claims, buyers will often make higher offers.
As people discover you’ve already had your home appraised, the number of interested buyers will skyrocket. Adding the mention of the pre-appraisal to your listing lets people know you’ve taken the extra steps to ensure your home is up to par. Again, this increases their trust in your and their probability of making an offer.
6. Smooth out the closing process.
You’ve shown off your house, wooed the buyers, and accepted their offer. Now, you have one more step, the most important step: the close. All the work you’ve done could fall apart at the close if the buyer doesn’t feel confident in their potential new home.
Too often, the deal falls apart at the last minute because the buyer wasn’t convinced you were telling the truth about the house. Or worse, the buyer discovers some problem that wasn’t disclosed. Having the pre-appraisal nips all of that in the bud. It removes all this doubt from the buyer so that all of you can focus on closing the deal. Buyers will be confident, relieved, and ready to move in.