Appraised Value Does Not Equal Market Value

Fresh off the Real Simple Syndication (RSS) feed, I find this Q&A from Inman News regarding Appraised versus Market Value.

Used to be a simpler time, as a seller, when you could justify your price by flashing the appraised value and getting that value or something awfully close. Those were the days when buyers seemed to be jumping like fish on a quiet Northern Canadian lake at dusk. Nowdays, the appraised value is a good indicator of the most a bank will lend for your property. And that's even making sure that the appraisal was a time of sale appraisal, as opposed to a refinance or a home equity appraisal.

Market value is the price at which your home finally sells. Realtors utilize their area experience in conjunction with comparable properties (active and sold) to come to a figure that they believe will be the price at which your home sells. Having a time of sale appraisal on your home prior to selling, in today's market, is one way to check that you are not overpricing your home for sale. However, sellers should not utilize the appraisal value as an indicator of what price the home will ultimately be sold.

As a seller, I would recommend that you take a sharp look at your current competition and comparable homes that have sold in the last three (3) months. The sold comparables will be the guide to where your home should eventually sell and the current competition will show you where you should be priced to cause your competition to sell your home.

[Cross Posted at Let's Talk Michigan Real Estate

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