The Media Is Now Confirming What Appraisers Have Been Reporting All Along

When I first got into the appraisal profession the guy I learned from would always say: “Appraisers don’t make value, downward trend they report it”.  This is more true today than ever before.  Appraisers have been getting a lot of bad press, especially recently, because we are being accused of killing deals.  In my opinion, which I guess you could say is biased, this is totally off base.  The national media, and local Birmingham media, is reporting what appraisers have been trying to convey all along, which is this: property values are not what they were several years ago, and as a matter of fact this is the third year they have taken a downward plunge in Jefferson County.  You can read the article  here that was written by Jeff Hansen at al.com.  This downward trend in values is not caused by appraisers, it is caused by the slow economy and growing inventory of foreclosure homes on the market.  Both of these things are causing property values to decline.

It makes sense that if values are not what they were, then we need to adjust our thinking and price our homes accordingly, and that means lowering the asking price if that is the main issue.  I know most of us (me included) may not want to accept the fact that our biggest investment is losing money, but if we are to overcome this dilemma and move forward we have to be realistic.  If you price your home to the market which it is in, then there should not be a problem with the appraisal.  I believe most Realtors do a good job when pricing a home but sometimes the homeowner has a preconceived notion about how much they want, or need, to get out of their house.  The best Realtor in the world will have a hard time selling a home that is overpriced, and if they do find a buyer they will then have to get over the appraisal hurdle.

A more realistic plan of action would be for the homeowner to let the Realtor do their job and set a price that is competitive for the market it is in.  If you feel the Realtor is off base, please get an appraisal to either confirm the Realtors results or provide support for listing at another price.  The money invested in an appraisal will more than pay for itself by reducing the time it takes to sell, and in turn reducing marketing expenses.  The advice for FSBO sellers (For Sale By Owner) is the same.  If you want to do the job right, price your home to sell.  You may want to save money on real estate commissions by doing all the work yourself but it will take you a lot longer if the home is not priced right.  The bottom line is that you must price your home to be competitive with the market that you are in, which includes looking at past closed sales as well as current active listings.  Only when you do this will the transaction be the smoothest.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.

Comments

  1. Great blog Tom. Thanks.

  2. Good advice, Tom.

  3. Great Post, Tom… and it rings so true on all fronts. Also, this is great advise for the homeowners and FSBO’s thinking of jumping in the game by themselves.

    I really like that “appraiser saying”.

    • Thanks Wendell. I feel the same way about the FSBO seller. They must use the best tools (appraisals) they can to be competitive with the Realtor listings.

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