5 Reasons Why A Realtor Should Order An Appraisal Before Listing A House

Realtors are experts at selling houses.  They are versed in what buyers want in a home.  They keep up with the latest in architectural styles, neighborhood trends and financing options.  Ideally all of this knowledge is maximized on every listing, but realistically that may not always be the case.  There may be times when one or more of the pieces of the Birmingham Alabama pre listing appraisal reportpuzzle may be missing.  When this is the case a Realtor may want to utilize the services of a Real Estate Appraiser to help them in selling a house.  I have listed below 5 Practical Reasons Why A Realtor Should Order An Appraisal Before Listing A House.

  1. Not Familiar With Property Values In The Area– There are time when a Realtor may not be familiar with property values in an area.  This could be because they do not sell in the area often, or property values in the area are changing so rapidly that they are not sure what to list it at.  Sometimes their are not sufficient comparable sales in the immediate area to reliably provide a list price.  At other times a home may be unique in design and appeal or even historical in nature making it difficult to price.  An appraiser can provide a written report that provides a value estimate with sales data to back up the value.  It may be necessary to choose sales from other similar areas if no sales have occurred in the subject neighborhood.  Appraisers also track property value trends in areas that are changing rapidly.
  2. Use An Appraisal To Back Up Their List Price To A Homeowner– The real estate market we are in right now is not like it was several years ago when values were steadily growing every year.  In many areas there is depreciation in property values.  Many times Realtors may arrive at a list price that the homeowner may not be happy with.  The homeowner may be emotionally attached to the home and not able to realistically accept that their home may not be worth what they think.  An appraisal may lend support to the Realtors list price and make the homeowner more comfortable with their decision.
  3. Use An Appraisal Or Appraisers Services To Accurately Quote Gross Living Area (GLA)– In the Birmingham, Alabama area the MLS recently set up an option for the Realtor to list the Gross Living Area (GLA), however most still don’t do this because they don’t want to take the chance of misquoting it.  The most reliable way to get accurate GLA is to take the information from the appraisal they ordered to get the current market value.  If for some reason an appraisal is not needed you can still have an appraiser measure the home for a modest fee and provide a floor plan sketch.  This is a great idea because it gives the buyer a better idea of how big the house is.  If  the potential buyer has furniture to fill a certain size house you wouldn’t want to sell them a house that is too small would you?
  4. Provide Peace of Mind To Buyers– Appraisers have gotten a bad rap lately for “killing deals”, however the bottom line is that appraisers don’t make value we report it.  If the value was right in the beginning then there should not have been a problem when the appraisal for financing was done.  By getting a “pre-appraisal” before listing a home the list price can be set with confidence and there should be no surprises.
  5. Clear Up Condition Items Before A Contract Is Written– Condition items are not typically a requirement to close for conventional loans, however they can be for FHA loans.  Many home are being sold with FHA financing these day and HUD usually requires repair items to be repaired prior to closing the loan.  If you get an appraisal before listing a home you will know what items will need to be repaired before the loan closes.  An FHA qualified appraiser will be able to tell you about these items, just make sure you let the appraiser know that you want the home appraised as if it would sell with an FHA loan.  By addressing these items up front the loan will closer quicker and the buyer will not be charged for final inspections.

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.



  1. Scott Austin, IFA says

    Tom, you have well stated the key points of one of my major soapboxes.

    I have to duct tape my head (to keep it from exploding) when I hear residential agents referring to “price per square foot”

    “Really? Now exactly what square footage are you referring to?” I ask the agent. Are you including below grade, or just above greade? What about the front porch and the sidewalk?

    At this point I get a very puzzled look from the agent who now is getting a glimpse that a residential “price per sq.ft. ” is a comparison which is extrapoltated to the point of obsurdity (more often than not).

    Houses are not a commodity and should not be compared on a basic per unit basis. But that is exactly what they do.

    • Hey Scott, thanks for sharing your thoughts on this subject. I am with you on the square foot thing. It is one of the most misunderstood topics in our area, especially since the local agents do not deal in square footage. Hope to year from you again.

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