Should you get an appraisal before listing your house for sale? Episode #299
Todd: Hello. Welcome to Todd Miller TV joined here today with Mark Gonzales who is the owner of Signature Appraisals and Mark, I just found out today that you have done about or over 3,000 appraisals, is that right?
Todd: OK. And each appraisal – how long is each appraisal take on average?
Mark: From inspection to actually sending out, on average, about four hours.
Todd: OK. So there’s a lot of work involved there. So basically, that’s 12,000 hours if we do the Math, 3,000 appraisals 4 hours each, 12,000, right?
Todd: OK. I read this book that said, I think the book was called Outliers and it said in the book that if you 10,000 hours of a thing, you become an expert on it. Meaning, if you’ve done like – I probably have easily done 10,000 hours of real estate. Now, I hit the 10,000 hours of video blogs. But you’ve done over – you’ve your 10,000 hours of appraisal work so you’re probably have it figured out by now.
Todd: OK. Probably even in your sleep. Good. OK. So with that in mind, here is the question I get all the time. When I go to list a property, value is always an issue because they will tell me, “Well, I talked to this other agent. He said it’s worth this or it’s worth this.” How often and how practical is it for somebody who’s – before they even list the house to get an appraisal done?
Mark: Well, you have to keep in mind that the appraisal cannot be used to secure a loan.
Todd: OK. But …
Mark: They can’t hand that to the buyer and say, “Here, use this and go get your loan.”
Mark: Absolutely not.
Mark: The bank that is securing the loan for the buyer will issue a request for an appraisal with their own appraisal management company and they will send out their own appraiser.
Todd: OK. But what if somebody just wants to “no” like maybe somebody owns five houses and they live in Hawaii and they’re investment houses and they just want appraisals for their own personal knowledge to maybe decide what to do with them.
Mark: That will be a good idea.
Mark: To make sure that they don’t under-list the property.
Todd: OK. Good. Because obviously, the concern there is that the agents have an agenda which is why they give different prices. So your idea is just to give them price that you think it’s valued at. That it would likely, another appraiser would come to that same conclusion.
Todd: OK, which is kind of an interesting point. How often would you say that happens where people call you out of the blue and go, “I need a pre-listing appraisal”?
Mark: It doesn’t happen very often with me. Some other appraisers probably – tend to get a little bit more of that work. But I’d say, maybe around five percent of the time.
Todd: When was the last time you did one just an appraisal for, “I got one last [Phonetic] [0:03:00], I just want to know.”
Mark: About two weeks ago.
Todd: So, OK, two weeks ago. So it does happen pretty regularly.
Todd: OK. With that being said, let’s say you do an appraisal for a listing. And then six months later, it goes under contract. And then they get an appraisal with a totally different value. Talk about some reasons that might happen.
Mark: I would suspect that they would get a different value at that time especially if the market is moving in one direction or the other, increasing, decreasing values, sales. You can have an appraisal done within weeks of each other and have a different opinion of value depending on what has sold within the area and at what price points.
Todd: How often – like if you have a sale that happens on the 1st of January, OK? And then you’re looking at the house now three months later, how much weight do you put on that value versus something closer – like something that was just sold or something six months ago? Like are they equally weighted because they’re all within six months or do you give higher weight to the ones more recent of the event?
Mark: More recent. You would give more weight but you’re also considering, are the amount matches, within the same subdivision, even if they were both maybe more of the same transactions or were they’re short sales or foreclosures can also have an impact.
Todd: Oh, that’s very interesting. So if it’s an equity sale, you’re going to tend to want to compare it with other equity sales, if you can?
Todd: OK, very good. So, you think it’s a good idea for people to maybe get a pre-listing appraisal to maybe save themselves some hassle?
Mark: Yes, that would probably save a lot of people some hassles if – especially again, if they – to keep them from undervaluing the property and listing it.
Todd: OK. Yeah.
Mark: Leaving money on the table.
Todd: They would leave – how much is appraisal cost typically? Like a rough numbers.
Mark: $330 and $350.
Todd: So that’s not much if you’re going to – if you make a thousand bucks more in the sale because your price is right. You made your money back.
Todd: If somebody wants to call and hire you to do an appraisal for them, how do they get in touch with you?
Mark: They can call me direct at 702-278-8840 and that’s my direct line. They can call me seven days a week.
Todd: OK. Sweet. Well, thank you very much for coming on the show. Ladies and gentlemen, Mark Gonzales, I wanted to share him with you. That’s my update and hope to see you on another video. Thanks.
Should you get an appraisal before listing your house for sale?