As multiple properties come on the market in the same neighborhood (or even street), I have been hearing a lot of chatter recently about pricing and how this can encourage higher home prices. I’d like to debunk that reasoning. When pricing a home (or accepting offers above asking), keeping a close eye on the potential appraisal value is imperative in achieving a successful sale.
Working with a local agent and a local lender are key, especially in an area as unique as Lake Linganore. Hopefully, the appraiser knows Lake Linganore intimately, or if they do not, is willing to work with the listing agent for guidance on the comps. This is easier said than done however, as appraisers are picked at random from a pool that the lender subscribes to. And Lake Linganore is especially difficult to appraise, due to the diversity of subdivisions, varying ages of the homes, access to amenities, and all of the new construction.
Here is a list of important details to keep in mind:
- Strong comps and a knowledgeable agent: Make sure the agent you work with supplies strong comps to support the list price. Most importantly, comps must have already closed. Appraisers will not use other active or even pending listings. Use the agent’s knowledge of the area to include any homes that may have sold ‘off market’ and are not available to the appraisers through the Multiple Listing System.
- Updates: Confirm that the appraiser gets a list of any updates you have done to the property.
- Subjective Items: Appraisers do take into account location, access, yard, view, condition and exterior features. This makes Linganore challenging for appraisers who are not acquainted with the area as they may struggle to find accurate comps, so it is valuable to have an agent who can supply them with the information they need.
- Multiple offers: If there were multiple offers, share the details. Although this cannot form part of the appraisal, it does help to show market value.
- Drive the conversation: Never set the listing to allow appraisals to be scheduled automatically online. If permitted, it may cut out the opportunity for interaction between appraiser and agent and the chance to share relevant information about the home.
No matter what the buyers are willing to pay, unless it is a cash offer or they can make up the difference between the appraised value and the price of the contract, getting an appraisal that supports the purchase price is vital to a successful settlement. While cash offers have always been rare, we are also seeing less and less offers over asking in this market by buyers relying on loans; partly because of the higher interest rates and partly due to job uncertainty. This means that no matter what you list your home for, the comps need to support the list price.
