It's not unusual for homes to be sold in a seller's market above their listed price or appraised value. So how much is your house worth? It can be difficult to price your house correctly, but there are some tools that you can use. For example, an appraiser can help you do a pre-appraisal.

A pre-appraisal is a great starting point for determining the correct asking price. You can then work with your agent to determine if the market is in good shape and if you should set a higher or lower price than what was appraised. Our Home Values page will give you insights into your local market. You can search by zip code, neighborhood, or city.

The accuracy of your appraisal, the local market demand, the appeal of the neighborhood, and the likelihood that you will get a cash buyer all influence whether you price your home higher than its appraisal.

A lender may order an appraisal before closing to protect their investment if you are selling to someone with financing. To make the transaction smooth, it's best to list the property at its appraised value or slightly less. Cash buyers are not bound by appraisals from lenders and can offer any amount they wish.

What Is A Pre-Listing Appraisal Of A Home?

Pre-listing home appraisals are performed by licensed appraisers who examine your home in person and determine its value. An appraiser will also take into account similar homes that have been sold in the area. Appraisals combine both technical valuations with the professional opinion on what each home's different elements are worth. Thus, there is always room for error.

What Appraisals Take Into Account

• Square footage

• Bathrooms and bedrooms

• Age of the house

• Age of mechanical systems

• Layout, condition, and finishes

• Locality and amenities nearby

• Recent comparable sales (usually three).

What The Appraisal Does Not Cover

Appraisers focus on the economic and technical aspects of the property but may overlook the human element. Buyers will pay what they believe the house is worth based on their desire to purchase it. Many buyers will even pay cash in a seller's market to distinguish between the appraised value and offer price.

Although an appraisal can give you a rough idea of the value of your home, it cannot predict how your home will perform on the open market. For example, you might get ten offers, and the price will go up. On the other hand, it may stay on the market for several weeks or months. In that case, you will need to reduce its price. These are factors that an appraiser cannot account for. A comparative market analysis (CMA), which weighs all factors in the local market, can be used to estimate your listing price. More information on this later.

Do I Need An Appraisal Before Listing?

Although a pre-appraisal doesn't have to be done, it's a good idea if there are a lot of recent home improvements and you don't know how much they've increased the value. Also, if there aren't any comparable listings or you're selling your home for sale by the owner (FSBO), they can be helpful.

Your home may sell in an extreme seller or buyers market. This could mean that your property is worth more than you appraised. Ask your agent if they believe a pre-appraisal would make sense.

Assessed Value vs. Appraised Value vs. Fair Market Value

Three terms can be used to determine the best price for your home: appraised value, assessed value, and fair market value. Understanding the differences between the three is important so that you are able to make an informed decision about how to price your house.

• Assessed Value

  The local tax assessor's office determines the assessed value of a house regularly. This is the number they use to calculate your property taxes. Therefore, it is not recommended that your home's assessed valuation be used in determining the listing price.

• Value At The Top

  After evaluating your property and comparing comparable sales, the appraised value is what your licensed professional appraiser will give you. Let's take, for example, that your home is identical to the one on the block but that you have updated the kitchen. Your appraised value will include credit for any kitchen updates you have made.

• Fair Market Value

  The fair market value of your home is the price a buyer will pay to purchase it. The decision of a buyer to offer a home depends on many factors such as local market conditions, economic conditions, interest rates, and demand. Their personal attachment to the property may also influence it.

  Sellers base their listing prices on what they believe is fair market value. This is because it provides the best pricing strategy. However, sellers may price their homes slightly below fair market value depending on the market. This is to incite a bidding war and drive the price up.

  How can you determine your fair market value? A CMA should be provided by your real estate agent that considers both the positive and negative aspects of your home and market trends and demand.

What Is The Average Price Of A House Appraised?

An appraisal will cost you approximately $400. However, the cost of the service can vary depending on where you live and how large your home is.

Alternatives To A Pre-Appraisal

These tools can be used in place of professional appraisals if your pre-listing budget doesn't allow for an agent to assist you.

• Use An Appraisal To Determine A Listing Price

  Keep your listing price close to your home's actual market value to avoid the buyer's appraisal being too low.

• Look At The Comps

  Take a look at the appraisal report's comps. Are these comps they really good? These comps should be current (sold in the last three months, if possible), close to your home, similar in size, number, and bathroom sizes, and comparable to your home.

  If you find comps that support a higher price, it is worth looking for additional comps. Comps that support your listing price can be passed to the buyer's appraiser.

• Do Not Overprice

  To find the ideal listing price, there is no magic number to add to your appraise figure. Appraisals can vary in their accuracy. Sometimes they are too low, other times they are too high, and sometimes they are just right. Don't let your appraiser get too high on your property.

  Overpricing could lead to a price reduction or a stale list, which can both be red flags for buyers. A buyer may offer you a deal, but the lender could make a lower appraisal.

• Remember To Keep Your Search Parameters In Mind

  Online buyers tend to look for homes at a certain price -- typically a range -- so remember that when you price your house.

  Let's assume your home appraises at $302,000. Your listing will be seen by buyers who have a maximum price of $300,000. If the price is $299,000, instead of $302,000. You may lose a lot of buyers if you list the home for $3,000 less than you should.

Is My House Worth The Asking Price?

Even if you have completed a pre-listing appraise, your buyer's lender will likely require that another appraisal be completed before closing. However, cash buyers may waive an appraisal.

If your buyer's lender has done an appraisal, it will need to return a value at or higher than your selling price to allow the deal to proceed. Low appraisals, while not a guarantee that your home will sell for the asking price, are more likely to be a problem in a seller's market. Why? Why?

Selling A House That Is Worth More Than Its Appraised Value Can Cause Problems

You can't guarantee the buyer will use the same appraisal number that you did for your home. Lenders won't approve financing if the buyer's appraisal is lower than the agreed-upon price.

Is It Possible To Sell A House For More Than Its Appraisal?

The deal can't be canceled if the seller's appraisal is higher than the sales price. These are some ways to move forward.

• The bank will finance the appraisal amount, but the buyer can pay the difference.

• The appraisal can be challenged by the buyer (subject to lender approval).

• If you are financially able, seller financing is possible.

• If they have enough money, the buyer can pay cash for the whole purchase.