Should a home appraisal come in just above the sale price?
- July 12th, 2015
- Matt Frentheway
- No comments
Dustin Harris, delves into this question in great detail. We’ll break it down for you in simpler terms. Here is the question a lot of buyers, yourself included, may ask when purchasing a home: “Why is the appraiser saying this home is just above the purchase price?” You may have noticed that this happens quite frequently. You may even have thought to yourself, “Appraisers don’t do anything!” Although it may seem that way, we really do, we promise! Here’s the deal: appraisers typically compare your home to comparable homes. We call these “comps.” We look at the price of the comps (or one comp, if that’s all that’s available) and evaluate the similarities and differences between them and your home. If the comp is just like your home, then your home is likely to be worth that much, slightly less, or slightly more. Here’s why we typically price homes right above asking price: the home is the ultimate comp. It doesn’t have different amenities. It hasn’t been remodeled more. It isn’t older. The home you want to buy is an exact replica of, well, itself!
Also, as Dustin explains in his article, appraisals should never really be exact. The only reason appraisals are exact is that banks expect an exact value. Since appraisals can be slightly higher or lower, it makes sense for us to appraise your home on the slightly higher end of the scale. This is why the appraisal of the home you buy will likely be just above asking price.
Of course this is not always the case. Some homes are really worth much less than the asking price, and, at Aspen Appraisal, we will tell you the truth about the real price of the home you are considering. If the home is worth less than asking price, you could find yourself in an awkward position when you look to sell or refinance. That’s why you want Aspen Appraisal to help you out when you buy a home: if the home falls into the minority of homes priced much too high, it could give you a world of hurt. Hopefully, though, you’ll find yourself in a situation where people are asking, “Did that home appraiser really do anything?”
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