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Accurate Valuation Quality Reporting Quick Turn Around Before buying a home or investment property... Know the value. Have it appraised. Let a certified appraiser find the value that you need to know in order to make the right decision. Buy, Sell, Hold. Know when the time is right. In recent years the perception has been that purchasing a property "by owner" is the best way to go. It saves you money. Right? Realtor commissions were saved and this savings trickled down to the buyer. Well… this appears to be
changing. In recent months we have observed that over 50% of the property selling "by owner," without general market exposure, are selling higher (above market value) than homes that were listed for sale. These properties are appraising lower than the sale price. Besides being an unwelcome factor for the buyer already under contract, this can pose a problem when attempting to secure financing since most lending institutions will lend money only on a percentage of the appraised value and not the purchase and/or contract price. One recent situation included a family considering the purchase of the home they had been renting for the past five years. The landlord (owner/seller) gave them an asking price of $75,000. The tenants/purchasers thought this value was too high, considering the location and the overall condition of the property. They felt a value of about $65,000 was more realistic. Upon recommendation from the lending institution they were interviewing with, the prospective purchasers decided to hire a certified appraiser to determine the estimated market value of the property. The lending institution had supplied a list of appraisers who were approved for this specific bank. The tenants were assured that if they went through with the transaction they could utilize this appraisal, thus saving the appraisal costs they would have had to pay anyway. Upon inspection of the subject property and a thorough analysis of sales in the immediate area, the appraiser determined that the estimated market value for this property was $55,000. The prospective purchasers were surprised (as was the seller) that the appraised value was so low and decided not to buy this property unless the seller was willing to sell at a more realistic price. In this particular situation, the buyers spent $275 but saved $10,000. This is not an isolated situation and has happened in many communities. So… do yourself a favor, when deciding to purchase a home "by owner" consider having a qualified professional determine the estimated market value of the property. It can save you much more than the cost of the appraisal.
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