Appraisal is the key

Many sellers think that the price of their home is determined solely by what they are willing to accept and what the buyer is willing to pay. However, there is one more variable that can affect the sale of a home assuming that a bank loan is involved -- the lender's appraisal.

To protect the interest of their investors, the buyer's mortgage lender hires a licensed appraiser to give an independent, objective opinion of what the property is worth. The appraiser compares the house with similar homes in the neighborhood that have recently sold. Square footage, amenities and the condition of the home are taken into account. Renovations and home improvements made by the seller usually add value to the home, while defects such as needed repairs or code violations decrease the property's value. The seller's real estate agent can provide the appraiser with up-to-date information about neighboring homes that have sold to support the seller's asking price.
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Common Selling Mistakes

Mistake #1 -- Placing the Wrong Price on Your Property
Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

Mistake #2 -- Mistaking Re-finance Appraisals for the Market Value
Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your realtor for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.

When you’re selling your home, the price you set is a critical factor in the return you’ll receive. That’s why you need a professional evaluation from an experienced Realtor. This person can provide you with an honest assessment of your home, based on several factors including:

* Market conditions
* Condition of your home
* Repairs or improvements
* Time frame

In real estate terms, market value is the price at which a particular house, in its current condition, will sell within 30 to 90 days.

If the price of your home is too high, several things could happen:

* Limits buyers. Potential buyers may not view your home, because it would be out of their buying range.
* Limits showings. Other salespeople may be less reluctant to view your home.
* Used as leverage. Other Realtors may use this home to sell against homes that are better priced.
* Extended stay on the market. When a home is on the market too long, it may be perceived as defective. Buyers may wonder, “what’s wrong,” or “why hasn’t this sold?”
* Lower price. An overpriced home, still on the market beyond the average selling time, could lead a lower selling price. To sell it, you will have to reduce the price, sometimes, several times. In the end, you’ll probably get less than if it had been properly priced at the start.
* Wasted time and energy. A bank appraisal is most often required to finance a home.