What's Your Home Worth

This is often one of the most difficult issues that needs to be resolved before listing a home for sale. I want to start by telling you what 2 professional and very experienced licensed appraisers told my while the 3 of us were waiting to testify at an arbitration hearing. "How close to the real value do you expect to be when you do an appraisal" was my question. The answer from both was "I'd like to be within 3% but certainly within 5%". Just for fun, let's work with 4% and see where that takes us. Say your homes real market value (defined as the price a willing and qualified buyer is prepared to pay and a motivated seller is willing to accept, neither acting under duress and with the property being exposed to the market place for a reasonable period of time) is $350,000. The first appraiser evaluates the property @ $335,000 and the second @ $365,000. That's a $30,000 spread and yet they're both within 4.3% of the true market value. You will often find in real life that the truth is somewhere in the middle, as it is in this case.

What is particularly interesting from a Realtor's point of view is that most real estate agents realize we're doing well to meet the standards that professional appraisers set for themselves. If you ask me to come and evaluate your property for the purpose of selling and I tell you $350,000 and you say "I was thinking more like $365,000" then in my opinion we're both "on the same page".

Just one more point to think about when considering your home's dollar value. Your family and friends are going to be telling you some likely unreliable numbers when you start talking about selling. That's because they are your family & friends and they want to make you feel good. If you're not sure and you want a completely unbiased opinion, why not hire an appraiser, better yet, hire 2. It's a very cheap price to pay (probably less than 0.25% of the value of your property) for 2 appraisals and you can feel pretty safe in splitting the difference between the 2 of them to get a completely accurate figure.