Which comes first…home appreciation or appraisals that support rising prices?
Appraisers are licensed by each state to correctly estimate the current market value of a property. But appraisers are people, too, and seem to be delivering valuations that anticipate rising prices, according to a recent analysis by real estate data firm CoreLogic.
CoreLogic crunched the numbers for 750,000 house appraisals in 2015 and 2016 and found that 69% of them were valued above the actual agreed sale price for those properties. Overall, the appraisals averaged 12% higher than the sale price. Meanwhile, 30.9% of the appraisals came in below the agreed sale price – overall, about 6.4% below.
You can help the appraiser assigned to you by the buyer’s lender with these tactics.
- First, collect comparable recent sales and create a short comparison of each of the sold houses to yours. Provide concrete and verifiable details, such as the fact that your house was remodeled two years ago while the other house was remodeled ten years ago; or that another house has a garage and your house doesn’t.
- Provide proof of the improvements you’ve made, with a list of updates and relevant details, such as the brand of appliances you installed in the kitchen.
- Include neighborhood conveniences in the tip sheet: appraisers don’t always know that, say, a local running path is a valued neighborhood amenity. Be sure to locate your house accurately on a map and to mark local parks, schools, shopping and major travel routes.
If the appraisal comes in high, that doesn’t mean you underpriced your house or that you are leaving money on the table. In fact, a high appraisal cements the buyer’s smart decision to purchase your house and will reassure the lender to complete the loan. Don’t see it as money left on the table – see it as expert evidence that the neighborhood, and the house, are a high-potential investment for the new owner.