Pricing An Appraised Property

[Ibrahim Hughes]

Hi All. This is my first property where I got it appraised before selling. I'm usually good with determining ARV's but this is a historic home so I got a certified appraisal done before I place it back on the market.

It was appraised for 82% more than what I'm in it for (price and some renovation work). However, I'm not sure if I want to price it at the appraised price with a little room to negotiate, slightly higher or a lot higher?

I know it sounds silly but this home should appeal to New Yorkers who appreciate Historic properties. The place is huge and I know at the end of the day an appraisal is just someone's professional opinion of what the house is worth.

My thinking is that someone may fall in love with the penna stone, elliptical style garage doors, the sea green slate roof etc. and offer cash. He may not care for an appraisal and decide that the house is worth $350k to him.

I think in the end I will start slightly above the appraisal price and see what happens. I expect that I will likely (not guaranteed though) have to come down below the appraisal price.

But just wanted to know your thoughts. Thanks in advance.

[J Scott]

We just got the first private appraisal we've ever gotten on one of our properties, as it's a new area for us, and there aren't a lot of great comps (my wife didn't want the appraisal but I did). My wife looked at the appraisal and listed the property for 10% higher. She didn't care what the appraisal came in at, she had an idea of what she could get someone to pay for it.

Ultimately, we got three offers the first week, with two of them full price (the other being a low-ball). So, we now have the property under contract for 10% more than the private appraisal. The lender appraisal was yesterday...we'll see where that comes in.

Anyway, the moral of the story is that the appraised value may be unrelated to what someone will pay, so treat them as different numbers. For appraisal, talk to an appraiser. For resale value, talk to an experienced agent who knows the area.