6 Market appraisal myths in Cheadle debunked
Putting your home up for sale can be an emotional endeavor. After you come to terms with the decision to say goodbye to a place where you created countless memories, some stranger with a clipboard or iPad comes along and puts a value on what’s priceless to you.
And that assessment has the power to tank the entire mood, as many prospective sellers have a preconceived opinion as to the value of their own home, but also what the appraisal actually means in the grand scheme of the selling process.
Yes, the appraisal is one of the scariest parts of the home-selling process—Seller can be easily offended if the valuer doesn’t value their home at as much as the sellers own expectations. Some sellers are never sure if the estate agent is truly factoring in those countless weekends you spent on backbreaking home upgrades—the Jacuzzi tub, the garden, the home office, gym, whatever it might be, which is simply not the case.
The agent is there to remove emotion from the process and the seller who desperately want to make a sale at the top price. Most experienced valuers will use a combination of market data, including recent and historic sales of similar properties in the area, current demand, location and what is for sale at the time of the appraisal. They will know what the market is like and what buyers are likely to be prepared to pay.
Myth No. 1: A market appraisal is the same thing as a home buyer inspection
Although both the estate agent you instruct to sell your home and the surveyor walk round your property and the agent may even point out obvious defects to the seller that could affect or be detrimental to the sale of the property, their job is to objectively assess the market value of the property.
A surveyor is looking at the property from a totally different perspective, they are looking at for defects that affect the condition of the property, structure, check therefore the suitability of the property as security for lenders to lend mortgage finance.
It is not the selling agents job to go into too much depth on the structural condition, but a good agent will not be afraid to tell you if they see a potential problem that it might be advisable to get looked at before the property goes on the market.
Myth No. 2: The lenders valuer works for the buyer
The buyer might pay for a scheme one valuation, although sometimes lenders will provide one free of charge.
However, the valuer is employed by the lender not the buyer. It doesn’t matter if you and the buyers have agreed on a price. The buyer’s lender needs to be on board because it’s the lender’s investment, too.
But don’t fear, even though the valuation is meant to protect the buyer’s lender from a bad deal, valuers are highly trained and supposed to be unbiased and ethical.
Myth No. 3: The initial appraisal will give you the magic number of what the buyer will pay
The appraisal process isn’t an exact science. In fact, the appraisal is only one agent’s opinion of what your home is worth. It doesn’t dictate how much the buyer should pay, or how much the seller should accept, although many sellers take as gospel the agents appraisal.
But let’s assume the seller is happy with the initial appraisal, the property goes on the market and a buyer is found at an agreeable price, which at the moment is often above the asking price with the scarcity of supply and phenomenal demand.
If your home is down valued by the lender and comes in lower than the price you and the buyer agreed upon, the lender isn’t going to divi up more money to make up the difference. Instead, it’ll be up to you and the buyer to figure out who pays for the shortfall. Can the buyer throw in more? Or do you, as the seller, need to cover the difference just to make the deal go through? Well, let the discussions begin and hopefully having a good agent with excellent negotiating skills can bring about a satisfactory resolution.
The seller and buyer can agree to negotiate a new purchase price to match the valuation, or a seller might consider finding someone willing to offer cash, which doesn’t require a mortgage valuation, however there is no guarantee you will receive any more, it is usually best to try and negotiate a compromise that works for both parties.
Buyers can pay any price they determine for the house, regardless of the valuation. The report simply provides guidance for the lender.
Myth No. 4: The bigger the house, the higher it will value at
Consider a supersized, usually extended home built on an average-size plot in an otherwise modestly priced neighbourhood. Although the home might dwarf its neighbours, that doesn’t mean it will be valued for that much more than neighbouring homes.
The value of the home is measured as if it were similar to others in the area that would commonly be expected on that same plot. In fact, some people might consider the bigger home more of a burden—after all, there’s more to be heated, cooled, insured and maintained, which is becoming an increasing concern for home buyers in the Cheadle area.
Myth No. 5: The more bells and whistles, the higher the Value
Wait a minute: What do you mean? our £20,000 investment in fancy top of the range appliances isn’t worth £20,000 extra on the value? OK, take a step back. This situation can be hard for sellers to wrap their heads around. But if you’ve overly improved your space with amenities that don’t exist in surrounding homes, there’s no nearby sales data the valuer can use to decide just what those amenities are worth and usually a lender will not take the price of appliances into consideration.
“If no one else in the area has a home cinema for instance, then typical buyers in that location probably don’t demand a home cinema, nice as it may be to have one. Making grandiose design changes to standard homes may not always add the desired value.
And that goes for your décor, too. You might think your home is worth more because of the impeccable vibe that you have given the house. But valuers are not going to value your home higher because the décor is beautiful. They make a straight value judgment on the quantifiable aspects of the house—that is, the square footage, physical condition, number of rooms, and other measurable data.
Myth No. 6: All amenities are created equal
If you’ve equipped your home with an occasional bedroom, home office or home gym that actually makes you want to work out—well, we applaud you. But if you converted your garage to do so, don’t expect the valuer to necessarily share your joy.
Your house has a garage for a reason. Many people still like a garage and want to park their cars where they are safely protected from the elements and break-ins. Others find a garage useful if storage space is limited, whilst many prefer it converted to useable space.
Our advice is just to think carefully before carrying out conversions/alterations as they may not always be as valuable as you hope. Consult us before you undertake a conversion if you have plans to sell. You can call Joe, Patrick or Maurice on 0161 428 3663, e-mail firstname.lastname@example.org or why not pop into out office on Cheadle High Street for a chat.
Alternatively, if you would like to arrange an up-to-date market appraisal for your home, please choose from our three options and book online here: https://mkiea.co.uk/valuation/
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