The Home Sellers Asking Price and the Home Buyers Offering Price
HOW MUCH IS THAT PROPERTY REALLY WORTH?Appraisals, Comparable Market
Analysis and Lenders.
Many people fail to order an Appraisal Report to establish
an offering price (Seller) or to substantiate a purchase price (Buyer).
An appraisal is a reliable estimate of value used to determine an offering price. A seller
should consider ordering an appraisal before listing the property. The cost of the
appraisal sometimes becomes a deterrent, especially if the seller knows that a buyer will
pay for one when applying for a loan. Without an appraisal a seller could lose a sale for
the following reasons:
The property appraised for less than the sale price when appraised by the lender's or
buyer's appraiser. The appraiser identified a problem that could have been solved before
the sale. The property will not qualify for the type of loan indicated on the contract,
allowing the buyer to back out of the deal.
Buyers applying for a loan are very often only interested in obtaining the loan and are
not too concerned about the prudence of buying the property at the agreed price. Some
buyers attempt to encourage appraisers to increase the appraised value so they can
purchase the home regardless of its value.
Lenders request the majority of real estate appraisals to establish the property's value
for loan purposes. Excluding periods of very low interest rates when many owners are
refinancing, most loans are for the purchase of real estate. Most appraisals are ordered
after a sale price is negotiated. Purchasers assume that lenders are looking after their
interests, but are they?
The appraiser is responsible only to the bank, if the lender orders the appraisal. Law
requires that the lender order the appraisal and the lender must be the client. Lenders
are expected to be prudent, but being prudent is protecting their interest, not
necessarily the purchaser's.
The real estate agent will typically perform a Comparative Market Analysis (CMA). The
appraisal laws in most states allow real estate agents to perform CMAs without an
appraiser's license or certification. A CMA is an important part of an agent's preparation
for a listing and consists of examining sales of properties in the area to arrive at a
listing price. The reliability of the CMA depends upon the agent's experience and the
characteristics of the property. The agent will suggest a selling price to the seller
based upon the analysis. Neither the seller or agent are bound by the results of the
analysis. The agent is not required to follow any formal procedure in completing the CMA.
If a seller wishes to list the property at a price higher than the price suggested by the
agent, then the agent may be forced to accept the listing at that price or risk losing a
commission. Many times the overpriced property "sits on the market" without any
offers. Ultimately the asking price is reduced to effect a sale. Every seller wishes to
obtain the highest price possible and every buyer wishes to pay the lowest price possible.
Remember, it's the art of negotiating that will benefit you most.
Tampa Bay Homes Search from Max Michael 'Max' Kuzmicz,
Realtor®
"The MaxTeam"™ at
Charles Rutenberg Realty
The Largest Tampa Bay Real Estate Office
Free Consultation Phone(727) 399-1347 E-Mail Max Here
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serious "Second Appointment" for Tampa Bay Real Estate Home Sellers.
MAX- Your Tampa Bay Real Estate Agent
offering a Free Service for Tampa Bay For Sale
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you in Selling Your Property. If you need assistance please contact me anytime E-Mail Max Here
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