Real Estate values in numerous parts of the country are in a downward spiral with no end in sight. Sellers are feeling frustrated about setting their listing price accurately. Sometimes it helps to get a brokers price opinion (BPO), but not always.
If a seller takes it a step further and orders an appraisal, the value opinion is only valid as of the effective date. Most do nothing to project values. Even a prospective valuation may not be the right tool for the typical seller, because of the importance of present values.
This may be the perfect scenario for utilizing consulting skills that will give the seller the knowledge needed to make educated decisions on how much to adjust the listing price of their home.
The last thing we want to do as Appraisers is to provide a worthless service.
In this market sellers are ordering appraisals more everyday. A single effective date valuation might not best serve the purpose of keeping their home competitive in the open market.
Measure the historic percentage of the decline and supply the rate of change that needs to be applied to the current “competitive” active listings. Instead of thinking in the traditional sense of adjusting for differences and giving one value, show a list of competitive listings (combined with showing only the most recent sales). Also show the seller historical decline rates at which the competitive listings should fall. This will enable the seller to have a realistic sense of how much to adjust the list price.
By giving our customers a service tailored to their circumstance, we can empower them to eliminate some of the frustration of selling their home in a downward market.
Author: Aaron O. Thomas, Certified Residential Appraiser. Aaron is owner of San Diego Appraisers, a real estate appraisal service provider specializing in residential properties located in the greater San Diego County area. San Diego Appraisers service mortgage brokers, CPAs, lawyers, businesses and homeowners.
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