Go Back  The Hull Truth - Boating and Fishing Forum > BOATING FORUMS > Dockside Chat
Reload this Page >

Market value vs appraised value on home

Notices

Market value vs appraised value on home

Old 05-05-2020, 05:38 PM
  #1  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default Market value vs appraised value on home

Will be selling a lake home in the very near future from a siblings estate. Appraised value came in at $780k. I know there are a lot of factors for determining asking price but wanted to get some feedback on the subject. We have a couple very interested potential buyers already and I’d love to save on the Realtor fees if at all possible. Seeking advice on how to best zero in on an asking price. We’ve looked at some comparables but I’m definitely no expert. May be worth the 6% realtor fees but that’s a lot of change if I already have a buyer wouldn’t you agree?
Old 05-05-2020, 05:44 PM
  #2  
Member
 
Join Date: May 2018
Location: SW, FL
Posts: 91
Received 111 Likes on 36 Posts
Default

Tell them to make you an offer. You might be surprised.
Old 05-05-2020, 05:49 PM
  #3  
Admirals Club Admiral's Club Member
 
Join Date: Mar 2016
Location: Albany, NY
Posts: 990
Received 384 Likes on 230 Posts
Default

My experience has been this.

Market value, at least here, is what the county thinks the house is worth based on recent sales data.

Appraisals are what mortgage brokers and real estate agents think the home is worth, based on what they think they can sell the house for in the area.

Old 05-05-2020, 05:52 PM
  #4  
Senior MemberCaptains Club Member
 
Join Date: May 2005
Location: South Florida
Posts: 9,465
Received 574 Likes on 331 Posts
Default

What do you mean by appraised value?

Do you mean you hired an appraiser? or do you mean the value the county/state is assigning to the property?

If it’s the latter, you should get yourself a realtor or a professional appraiser ASAP before you potentially give away a lot of money.

If a real appraiser looked at the property, his report should have contained the comps he used as well as value adjustments that he used to get your number.

Last edited by Flot; 05-05-2020 at 05:57 PM.
Old 05-05-2020, 05:59 PM
  #5  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default

Originally Posted by Flot View Post
What do you mean by appraised value?

Do you mean you hired an appraiser? or do you mean the value the county/state is assigning to the property?

If it’s the latter, you should get yourself a realtor or a professional appraiser ASAP before you potentially give away a lot of money.

If a real appraiser looked at the property, his report should have contained the comps he used as well as value adjustments that he used to get your number.
Yes a professional appraiser is who we used.
Old 05-05-2020, 06:00 PM
  #6  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default

Any benefit to obtaining two separate appraisals??
Old 05-05-2020, 06:02 PM
  #7  
Admirals Club Admiral's Club Member
 
Join Date: Jul 2012
Posts: 2,836
Received 612 Likes on 382 Posts
Default

Originally Posted by wmflyfisher View Post
Yes a professional appraiser is who we used.
Do you have a copy and the comps they used to assess your property?
Old 05-05-2020, 06:03 PM
  #8  
Senior MemberCaptains Club Member
 
Join Date: May 2005
Location: South Florida
Posts: 9,465
Received 574 Likes on 331 Posts
Default

Originally Posted by wmflyfisher View Post
Any benefit to obtaining two separate appraisals??
Sure, if you’re determined to skip the realtor, paying another $300-600 you should get a new opinion of value to go off of. Depending on the recent sales and property, you may end up with the same set of comps being used. In any case you should get a number back that is reasonably close to the first appraisal, which of course should be close to the same number a bank would get back when they hire an appraiser for mortgage purposes.

Now if appraisal #2 comes back wildly different, well, back to the drawing board.

Worst case sounds like you’d be out a thousand bucks, you might close the sale yourself, and you probably have the time while the estate is getting settled so you may as well spend a week or so working through that. I wouldn’t drag it on too long though, the market still has a lot of buyer’s momentum in it but it isn’t clear if/when that will dry up.

This wouldn’t be a terrible approach considering you already have a potential buyer, since you could quite literally go to him and show him the two appraisals and either pick the lower, or average, and offer the house to him at that price. It also would not be unreasonable for the buyer to come back at 3-6% lower than that since he knows you’d normally be paying two realtor’s commissions out of that figure.

You may also very quickly learn that your potential buyer is not even remotely in the ballpark of what the appraised value is.

To answer your original question - if you were confident in that appraisal and were listing it publicly, there’s a lot more than just the actual value to go off of to determine price. Is the house unique in its market? Is the kind of buyer who will be attracted to it going to get a mortgage? (regular or jumbo?) What are the listing comps vs the sold comps like? Does the house need work or is it ready to go? How long do you want it to sit on the market? How confident are YOU in the market just now? The right listing price is part psychology and part data crunching but it isn’t rocket science.

Also make sure you’re in sync with your estate attorney about the title status and timing for a sale, it can drag out and you can lose buyers.

Last edited by Flot; 05-06-2020 at 08:57 AM.
Old 05-05-2020, 06:06 PM
  #9  
Admirals Club Admiral's Club Member
 
Join Date: Jun 2017
Location: Port Charlotte
Posts: 344
Received 68 Likes on 45 Posts
Default

I am with the others if you have a professional appraisal the I would tell the other people to give you an offer. Cost of a good Real estate lawyer to draw up an iron clad contract is very inexpensive even on the high side your talking maybe $2k tops and that is way less than 6% of potentially $700K.

its very easy to know what your home should sell for with the appraisal look at the list of comp's and go on Zillow, Realtor.com etc and look at comparable home listings in the area along with sales. Sales tell you the most as it is what people were actually willing to pay compared to list and appraised value.

Plenty of realtors on here that will give you some pointers as well but I am sorry if I had a buyer I would not use a realtor I would use a lawyer and save some money. be different if you had no buyer and had to market the house put on listings etc I would not go through that
Old 05-05-2020, 06:18 PM
  #10  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default

Originally Posted by RyanL11 View Post
Do you have a copy and the comps they used to assess your property?
Yes
Old 05-05-2020, 06:24 PM
  #11  
Member
 
Join Date: Feb 2019
Location: Delray Beach, FL
Posts: 38
Received 7 Likes on 6 Posts
Default

I sold a house recently and tried to sell it on my own, to find the asking price I just looked at comparable properties for sale in the general area. Posted an ad in our local Nextdoor website with a few bites that led no where. Eventually found a discount broker to sell it, his asking price was dead on from what I was asking. He listed the property and we had 8 offers overnight! We went with the highest offer which was $2K over the asking price.

If I was selling the house on my own I would have accepted a offer below 6% of the asking price($21K in this case) Buyers would have gotten a big break, I would have been happy selling it. I sold a couple of properties on my own last year and it really wasn't that difficult. The title company does most of the work. I just got a contract signed.
Old 05-05-2020, 07:40 PM
  #12  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2012
Location: Madeira Beach, FL
Posts: 145
Likes: 0
Received 165 Likes on 70 Posts
Default

Part of the equation is to know what the purpose of the appraisal was when you had it done. Did you ask for a "Market Value Appraisal" or an insurance value appraisal, replacement cost appraisal, etc. I would assume that the appraisal is likely a Market Value job, which is most common. If so, you should have a list of comps that you can see that the appraiser used, then adjusted, to arrive at the value conclusion. The value is the market value of the home, regardless of "how" it is sold (ie. realtor involved or not). The use of a real estate agent/broker is the cost of a service provided and not reflected in the value of the home. If you have interested buyers let them know of the appraised value and perhaps offer a small discount for the lack of paying brokerage fees (good deal for both). But, discounting it by 6% is a mistake, because then only the buyer gets the benefit and you don't get any help in the sale process, nor the exposure to the market that may result in a higher sale price if the home is in a high-demand area.

I'm a real estate broker, selling $15-20million per year (while also managing an office of 25 agents), with 29 years of experience in the market. If I can help you in any way, please let me know (no charge for some email/phone help for a THT'er)
Old 05-05-2020, 08:30 PM
  #13  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default

Originally Posted by MikeMadBch View Post
Part of the equation is to know what the purpose of the appraisal was when you had it done. Did you ask for a "Market Value Appraisal" or an insurance value appraisal, replacement cost appraisal, etc. I would assume that the appraisal is likely a Market Value job, which is most common. If so, you should have a list of comps that you can see that the appraiser used, then adjusted, to arrive at the value conclusion. The value is the market value of the home, regardless of "how" it is sold (ie. realtor involved or not). The use of a real estate agent/broker is the cost of a service provided and not reflected in the value of the home. If you have interested buyers let them know of the appraised value and perhaps offer a small discount for the lack of paying brokerage fees (good deal for both). But, discounting it by 6% is a mistake, because then only the buyer gets the benefit and you don't get any help in the sale process, nor the exposure to the market that may result in a higher sale price if the home is in a high-demand area.

I'm a real estate broker, selling $15-20million per year (while also managing an office of 25 agents), with 29 years of experience in the market. If I can help you in any way, please let me know (no charge for some email/phone help for a THT'er)
PM sent...
Old 05-06-2020, 03:16 AM
  #14  
Senior MemberCaptains Club Member
 
Join Date: Feb 2005
Location: Falmouth, MA
Posts: 5,924
Received 530 Likes on 340 Posts
Default

In my area realtors will come in and give you a written market analysis for free. Now while I don’t think it’s fair to have them waste their time if there’s no way you’re going to use a realtor, if you’re on the fence, then I would call 3 different realtors and have them each do an analysis and give you their sales pitches. You may end up thinking one of them is worth their commission and hire them. If not, you will end up with three written market analyses. Also, in my area, you would be able to find many realtors (all?) who would sell a house in that price range for 4% if buyer uses their own realtor and 2-2.5% if they don’t. In other words, negotiate the commission.
Old 05-06-2020, 03:52 AM
  #15  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Jan 2005
Location: SC
Posts: 13,051
Received 8,706 Likes on 4,644 Posts
Default

What is the connection to the potential pool of buyers that you already have identified? Would they be looking at it for personal use, or as an investment/flip?
Old 05-06-2020, 04:39 AM
  #16  
Senior Member
Thread Starter
 
Join Date: Jun 2008
Location: Inlet Beach, FL
Posts: 1,367
Received 31 Likes on 26 Posts
Default

Originally Posted by autobaun70 View Post
What is the connection to the potential pool of buyers that you already have identified? Would they be looking at it for personal use, or as an investment/flip?
Both of them are interested for personal use.
Old 05-06-2020, 04:43 AM
  #17  
Admirals Club Admiral's Club Member
 
Join Date: Apr 2012
Posts: 1,606
Received 439 Likes on 253 Posts
Default

An appraisal is looking backwards, I would consult with a realtor in the market to see what they think the home is worth and what they would list it at. This is all before you sign a contract. Then speak with the couple and see what they want to offer. If it falls through then list it with said agent.
Old 05-06-2020, 04:53 AM
  #18  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2013
Location: Kent Island, MD
Posts: 560
Received 965 Likes on 599 Posts
Default

If the prospective party is a cash buyer, I would request an offer.
I sold my parents home with a free Zillow listing, the R/E market sucks in that area and I received a bona-fide offer from a party that looked at the property earlier, that after deducting R/E commissions and the risk of it sitting unsold. I accepted the offer as-is no repairs and it proved to be a good move.
Old 05-06-2020, 05:00 AM
  #19  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Jan 2005
Location: SC
Posts: 13,051
Received 8,706 Likes on 4,644 Posts
Default

Originally Posted by wmflyfisher View Post
Both of them are interested for personal use.
I would be up front that you are getting appraisals done as part of closing out the estate (don't disclose you have already done so) and see what they have in mind. Ideally one or both have paying cash in mind which would lessen the risk of a contract falling through due to a bank's assessment disagreeing with your appraiser(s).
Old 05-06-2020, 05:08 AM
  #20  
Admirals Club Admiral's Club Member
 
Join Date: Jun 2009
Location: Vero Beach, FL
Posts: 7,198
Received 1,377 Likes on 732 Posts
Default

In my mind, an appraisal should be two numbers. That being what it is, the first question from an appraiser is "What do you want the appraisal for?" as in loan? seller? buyer/ etc. All BS. There are twovalues to a house: 1) what would it take to rebuild and, 2) what is a true for sale price.

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.