I’ve talked about how home inspections help sellers as well as buyers. Hiring an inspector to come out and check out your real estate in Lake Havasu before you place it on the market makes good sense. It allows you to address potential issues before you list it on the Havasu real estate market and before a buyer might see it. But can the same be said for an appraisal? No. While knowing your market value helps you figure out a good list price, an appraisal early on in the home selling process might actually hurt you. And it would be a waste of money for a seller to pay for it since it’s the buyer’s responsibility. So, you might be asking yourself one question: what’s the difference between market value and appraised value?
Market Value vs Appraised Value
Real estate agents use “comps” to help determine the market value of your real estate in Lake Havasu. First, the agent walks through your home to see what it has to offer a buyer in the Havasu real estate market. Then, they scour recent sales as well as current listings that are comparable in size, age, and amenities to your property. Thus, they’re called “comps”. This provides a good indication as to what buyers are willing to pay in the current real estate market. If a buyer falls in love with your house, they won’t necessarily care about its appraised value.
While appraisers may use “comps” to help determine the appraised value of your real estate in Lake Havasu, that’s where the similarities between market value and appraised value end. Unlike the emotional ties to market value, an appraised value is all business. Banks require the buyer to pay for an appraisal as part of the loan approval process. It must appraise for at least what the buyer needs to borrow in order for the bank to approve it. Since the buyer must pay for an appraisal, save your money and let them. Besides, if you do decide to spend several hundred dollars for an appraisal as a possible negotiation chip, the buyer’s lender won’t accept it. It could be seen as biased coming from the seller. Instead, they require a completely independent third party to perform the appraisal. So, it would be a waste of your money to do one yourself. Also, depending on how long the escrow process takes, the appraised value of your home could change from the time you had an appraisal done and when the lender requires the buyer to pay for an appraisal since it’s something that takes place later in the process.
Still confused by market value vs appraised value? Feel free to contact me with any questions you may have. If I don’t have the answer, I can definitely find it for you.
Alexis Steel – 928-303-2199
Keller Williams Arizona Living Realty
Search homes at: www.TheHavasuHome.com