| Copyright 2005 All Rights Reserved Charles E. Marunde & FreeRealEstateLaw.com |
| You Need A Good Appraisal or Accurate CMA |
Many people guess what their home is worth and put it on the market, hoping it will
be worth that. I actually had clients who told me how they came up with the selling
price on their house. It was the listed price of the new house they wanted to buy in
another state. Interesting. Of course, I politely explained that the price of the new
home had no relationship whatsoever with the fair market value of the current home.
Buyers would certainly know that. Try and tell a Buyer you want $50,000 over fair
market value, because you'll need it to buy your new house. Of course, these clients
did not really think this through. They did not realize that what they needed and what
the FMV would be are not necessarily the same number.
A Realtor can get a beautiful CMA (Comparative Market Analysis) from the MLS
(Multiple Listing Service), but non MLS members won't have that same access, so a
FSBO will have to resort to what are probably less accurate and more labor intensive
methods to do a good CMA.
I have a strong conviction about arriving at the listing price, whether a FSBO or listed
with a Realtor. I believe it must be an accurate FMV. An experienced Realtor using
the MLS can arrive at an accurate FMV, but it takes hard work to make the
necessary adjustments up and down for the comparables to arrive at the best FMV
for your home. Because it is so hard for a FSBO to do this accurately without a lot of
training and little guesswork, I strongly recommend that you hire a licensed
appraiser and pay him for what is the equivalent of a bank appraisal. The
reason for this is that it is extremely effective to show a prospective Buyer how you
arrived at the asking price. They never argue with it. It is well documented, has
color pictures of the comps, includes all the amenities and the values, and has an
authoritative bottom line number. This same appraisal is good for six months and
can be used by your buyer with their own bank. While some appraisals take weeks
to get done, your appraisal is already done and the Buyer can take it to the bank.
The appraisal will cost $400, more or less, but just tell the Buyers that while you have
done them a favor by getting it done in advance, you expect to be reimbursed at
closing as it is normally their cost anyway. It may be obvious, but another great thing
you accomplished by getting the appraisal done in advance is to eliminate conflict
and offer/counteroffer/counteroffer, etc. I recommend you tell the Buyers the
price is the appraisal price . . . period. Explain that the appraisal eliminates the
uncertainty for them about what the FMV of the house is, eliminates the need for the
games that Buyers and Sellers often play without an appraisal, both trying to take
advantage of the other, to get more than the appraisal for the Seller and to pay less
than the appraisal for the Buyer. This is very effective!
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| If you haven't sold three dozen homes, you are still a novice and in the education phase of understanding how to sell a FSBO. This author has helped sell hundreds of homes, and can easily admit I am still learning. It's what you don't know that can come back to bite you. It has been said that we learn best by making mistakes, but it would be a disaster if you had to loose a lot of your money just to learn something about selling real estate. It is the intention of this web site to help you avoid that kind of nightmare and to successfully sell your own home. If after studying everything you can get your hands on, you decide your want a Realtor, that is still your option, but at least you would be making a fully informed decision. |
