When to disclose recent appraisal to potential listing agent?

Question

Hi, we are unexpectedly selling a house we own that we just had appraised in February for a refinance. I have a couple of agents referred to me for listing the property. I am uncertain whether to disclose the appraisal estimate either before or after getting the brokers opinion of value. Any thoughts on the timing of that are appreciated. The house is in the greater Seattle area. The market seems to be stabilizing a bit.

Thanks,

Chris

Thanks,

Chris

Shannon Allen · Answer

I would definitely rely on the BPO from a Broker, an appraisal that you received in February may not be relevant today.  I would tell the agent about the appraisal if they are a good agent they won't need it to complete their own evaluations and this may help you decide between the two agents

Patricia Steiner · Answer

Don't confuse appraisal value when obtained for financing with actual valuation...two different things.  When an appraisal is obtained for financing/refinancing, it goes through underwriting by the lender and is often times adjusted to meet their criteria.  And, in my market, property values are increasing month-over-month so February's value doesn't matter.  Comparable sales are defined as those closed within the past 30 days and within a 1 mile radius. Those sales are then adjusted for square footage, number of rooms, and more.  My recommendation would be to let those vying for your business to do an independent analysis and come to you with a value and the criteria used.  From that process, you will be able to see who actually did the work (and it's not a quick process) versus who is "buying your listing" by giving you an inflated price that won't bode well for a quick sale.  Hope this helps...

Manny Vasquez · Answer

I totally agree with @Shannon Allen's comment.  The appraisal that you received back in February (about 5 months ago) will not be relevant today.  I would allow the Listing Agent's to give you their "listing price range" based on their comparable market analysis.  I trust that whatever price they give you will be more representative of the appraisal you received back in February.  However, if there is a wide gap between the appraisal you received back in February vs what the listing agents are giving you, figure out why that is.  If you want to conduct your own "comparable sales" to figure out how much you want to sell your house for, then go into your favorite home searching website (i.e. Zillow, Trulia, Redfin, Realtor, etc.) and look for properties that have sold in the last 3 months (as these will be the same properties that an appraiser will use when conducting his appraisal.  They may go further back than 3 months if he can't find enough "similar" properties to compare on price).   As an FYI, most banks don't accept appraisals that are more than 90 days old.

Lien Vuong · Answer

I would get the price from all the agents (they should land at something similar) and discuss the appraisal with the agent that you've chosen to go with to represent you.

Mya Toohey · Answer

@Chris Wilson

Hi Chris, I'm in Tampa Florida area and our market is finally slowing down as well.  Appraisals are a matter of an unbiased opinion.  There are no standards in  which appraisers shooter their comps.  It won't make a difference on anything.  You can use it as a guide to price the home, but, if more houses near you that are comps, they will use the ones within .5-1 Mile, same beds and baths and within 180 days.  They have the choice to pick which ones they use and add or subtract value according to finishings, lot size, garage and so on.  Given the market went up in the last 180 days, you may even get a higher appreciation than the one you have and if yours is referenced, it could be used against you.  Keep it safe and let the listing agents do their magic.  Best of luck.

Sergey A. Petrov · Answer

@Chris Wilson - will send you a private message...

Chris Wilson · Answer

@Sergey A. Petrov Thanks for your perspective on the local market now. I can't say that I would disagree with that. We sold our home in Sammamish last year and I was much less concerned about setting the list price as I was confident the market would tell us quickly what it was worth to someone. Today the market is less insane if you will and the rise in interest rates certainly impact the sense of value and affordability. In answer to your question it appraised at 930K in February and the zip code is 98072.

Russell Brazil · Answer

The appraisal may, or may not have any relation to reality. Appraisals for refinances, where a lay person meet the appraiser, are typically lower than fair market value by a descent amount.

Conner Olsen · Answer

@Chris Wilson I was looking at a property that appraised for 775k in January and now they can't sell it for 645k. That appraisal seemed 10% too high. All of those comps that were used for the appraisal in February won't be used as comps today. Appraisers like to stick to the last 3 months, 6 months if necessary.

Sergey A. Petrov · Answer

@Chris Wilson - as others noted, an appraisal for a refi is not the same as market value. the very definition of market value is what a buyer is willing to pay for a thing and what a seller is willing to accept for a thing (and you then hope the appraisal supports that number). so, trying to compare a refi appraisal in February to market value in July is comparing apples to oranges to pineapples or pickles. market value in February to market value today is probably flat (but don't expect multiple offers or bidding wars unless you underprice when you list - bad idea today!). market value in April / May to market value in July is probably a 5-10% haircut. it also greatly depends on your price point (are you at $1.5m+ or $500k-?) and the zip code. some are holding "value" better than others. days on market is increasing (think holding costs here). failed financing is becoming a thing - someone applied for financing at 4-5% 2 months ago only to see the 6-7% rates today and all of a sudden the buyer no longer qualifies...or it under appraises - these will become more frequent as well as more recently sold comps become available. Many closed sales today represent contracts / sales that were signed 4-6+ weeks ago. we haven't stabilized quite yet...

what zip code are you in and what is your price point?

When to disclose recent appraisal to potential listing agent?

Most Popular Reply