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Pre-purchase appraisals will identify a home’s actual living area and
market value BEFORE a home buyer makes an offer and ties up earnest
money.
Almost half the time, tax records are wrong about home size. Even
though appraisers don’t rely on “price per square foot” to estimate
value, living area will substantially influence its market value and
what buyers should pay.
Pre-purchase appraisals will identify any major condition problems and
could help buyers avoid costly mistakes.
Buyer Brokers can reduce their
own liability by recommending a pre-purchase appraisal with full
interior & exterior inspection plus a measured floor plan. Issues can be
negotiated and resolved before a lender gets involved. Later, the
appraisal can be utilized by any lender for mortgage purposes.
The definition of value listing Realtors use is “highest possible”
selling price and agents are obligated by their fiduciary relationship
with each seller to try to get the highest price no matter how long it
takes. On the other hand, Real Estate Appraisers estimate the “most
probable” selling price for lenders and buyers within a reasonable
marketing time. There is often a substantial difference between these
two values!
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Pre-purchase appraisals will help provide Realtors and home buyers with
negotiating leverage. |
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Pre-purchase appraisals will help unrealistic sellers understand
their property value. |
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Sellers will be more likely to accept a buyer’s offer if
it is supported by an accurate appraisal. |
Even if
emotional buyers want to pay more than a property is worth, they are not
justified in doing so since they could acquire a similar property in a
similar location for a lower price. Also, even if buyers and sellers
agree on the “highest possible” selling price in a purchase contract,
the sale will fall through when the mortgage appraiser reports the
actual value to the lender. Pre-purchase appraisals will help your
buyers get the most for their money.
Why not
resolve these issues in advance?
A pre-purchase appraisal will
prevent your deal from falling apart or being delayed. Since time kills
all deals, Buyer Brokers can enjoy our three day appraisal service and
avoid waiting two weeks for the typical mortgage appraisal! A
pre-purchase appraisal can even help sellers determine if a contribution
to the buyer’s financing is possible.
An accurate
appraisal is very important because so much national wealth lies in real
estate that the determination of its value is critical to the economic
well being of society as a whole.
Also, since the appraiser is
trained to be an impartial third party in the lending process, the
appraisal serves as a vital "check in the system" and protects buyers
from overpaying for property as well as lenders from over-lending to
borrowers. An appraisal is a lot more than a “price per square foot”
exercise.
Buyer Brokers should stop and think…if your buyer pays too much
for a home, no one else will be blamed when they learn the truth. Future
referrals depend on happy buyers.
I started appraising real estate full time in 1973 and I’ve
worked with thousands of Realtors and buyers over the last quarter
century. We have also received many awards for appraisal accuracy from
national relocation companies!
An experienced appraiser can also estimate the increase in value when
condition problems are corrected which would confirm a home’s value for
reluctant buyers considering a fixer upper!
I welcome the opportunity to correctly appraise your buyers’ dream
homes.
Warmest regards,
Ross Walker |
