Good morning! It's a lovely Saturday morning after some beautiful storms yesterday. Hello, I'm Gary Edelbrock and after recently speaking with my friend Lee Amble, I thought it would be a great thing if he wrote a column about appraisals, comparables and the right price.
What Is Your Home Worth? Who Really Knows?
Written By Lee Amble, Realtor, Consultant
What is your home really worth? With so many ideas out there, who do you believe? If you have a home to buy or sell, this is very important and very confusing to many including me, even with 37 years experience in selling homes. This article may help answer your questions, however, on the other hand, it may be even more confusing.
We will examine Zillow and Trulia types, Appraisers, Realtors, Buyers and Sellers and when we get done, you make the choice. As I mentioned, I've sold property for 37 years, but in the past 45 days, we have had personal experience with 2 appraisals that I did not agree with at all. They were both in my favor, but I do not feel they were right or even close to right. In my opinion, they cost each seller about $15,000 to $20,000 each. Is that right? These were both fee appraisals. How could this happen? Use of the internet for information without enough boots on the ground and just using the seat in front of the computer will not give the totally right information.
Most values are judged by using comparable sales; you have heard that for years. In the past, appraisers at least drove by the comparable. Some may not do this anymore. Hopefully, the old time appraisers still do. Buyers, Sellers and Realtors look at lot size, tax rolls, comparables and have actually seen some of them. When appraisers drive by, do they really know the usability, drainage, views, trees, vegetation, the neighborhood, traffic, etc. Absolutely not. Is this right? You make the call.
Regarding those appraisals I mentioned, two of my sales had comparables which were totally wrong - different areas, bad driveways and drainage. Also mostly unusable lots, the subject homes had none of the defects mentioned, plus the tax rolls showed a valuation of about 30% less. Evidently, the tax valuation was not considered. Their eyes must have been closed.
What I predict will happen in the future unless some appraisers change the way they do appraisals, they will be replaced by Zillow, Trulia, and other internet sites. With these sites, the buyers/sellers may hire someone like home inspectors or someone else to verify condition, sq. ft. size, lot condition and size. Let's say for $100.00 , all done, this is probably where we are going. It may, in fact, even be better as Zillow and others are waiting and may have the tools to do this now. As I said earlier, too much internet, too much automation. Realtors also beware of your profession as Zillow already provides a site for buyers and sellers to buy and sell.
BEST FROM TOP TO BOTTOM:
REALTORS: Active Realtors see the most homes, both inside and out. They show them to buyers, go on office tours, open houses and also the MLS Realtor home tours.
HOME BUYERS: Many buyers also go to open houses, study the internet, look at homes while buying and searching for their homes and, soon, can make fine comparisons.
HOME SELLERS: Once a seller and a buyer have agreed on a price, this is really the one and only true price. The buyers and sellers have to be real buyers and sellers, not a fraudulent sale to get a loan.
FEE APPRAISERS: They beat Zillow only because they have actually been in the subject home and on the property, but it is then all destroyed by comparables seemingly they have never seen.
ZILLOW AND OTHER INTERNET VALUATION SITES: A year ago, they would not have even made any list, but my latest experiences with fee appraisers and the misuse of comparables, leads me to look at them as a somewhat viable source of information for you, the buyer, but not the seller.
I went to the University of Maryland to take a month long appraisal course in 1978 because I did not believe in the process and I wanted them to prove me wrong. Before the final test during the final reviews, the instructor clearly said the only true value of a property was: What an able and willing buyer and seller agree upon as the selling price. That is what I thought then and still do today. I guess I've probably been right for 37 years!
I hope this "Food for Thought" article will give you some things to think about. Thank you for reading! If you have any further questions or ideas for articles you would like to read in the future, please call.
"Remember, Experience Isn't Expensive, It's Priceless!! Selling A Home Is Easy, Doing It Right Is The Key!"
Lee Amble, Realtor/Consultant
NATIONAL REALTY OF PRESCOTT
Lee's cell: 928 533-4455
Jan's cell: 928 533-4488