FREQUENTLY ASKED QUESTIONS
When selling your home, you must remember the old saying “you only get one chance to make a first impression”. This old statement is even more important to remember than ever before. As technology has advanced, the majority of buyers begin their “home shopping process” on the Internet and since there are so many choices, sellers must look impressive online to get buyers to add their home to the “shopping list.” Then once the buyers come to property for a showing, in order to beat all the competition that exists on the market, sellers must completely “wow” the buyers in person.
I always recommend that my sellers take an honest look at their house as though they are considering buying it – start at the street and look at what should be done to make the property look as attractive as possible from “curb to door”. Once inside, sellers should walk through every room, opening every door, just like a buyer will do. What clutter can be removed? What organization (especially in closets) is needed? Are there any pieces of furniture that can be removed from each room that will create space and make the home “feel larger”. Remove unneeded decor from tables, mantles, etc and clean off surfaces such as countertops in the kitchen and bathroom.
An overall rule should be “everything should have a place and everything is always in its place” – this rule needs to be kept while the home is on the market so that any buyer that visits the home will say “wow” over and over while they walk thru the home.
For additional suggestions for preparing your home and things to do “just before a showing” check out our“Quick Tips for Sellers.”
In my opinion, the State of Tennessee does NOT make it very difficult to obtain a real estate license, which is very unfortunate for buyers and sellers since your home is often the largest asset you will ever purchase (and for most people, will be one of their largest investments for the future).
As with most professional industries, continuing education is required for real estate agents; however, in addition to what is required by State of TN, additional education is available for agents that want it. Some of this additional education helps agents become more knowledgeable about marketing, contracts, negotiations, and how to represent their clients in a manner that will accomplish the client’s objectives. Some of the additional education comes in the form of “mini degrees” or designations that signify that an agent has successfully completed the courses.
Here are few examples:
- GRI – Graduate Real Estate Institute
- ABR – Accredited Buyer Representative
- CRS – Certified Residential Specialist
- CRB – Certified Residential Broker
- SRS – Seller Representative Specialist
- Broker – higher form of licensure and required to be principle broker of a company
Statistically, real estate agents that have earned designations have more success in their business, which is common for other industries as well – in general, it is usually true that individuals who invest the time and money to be better educated and stay “on top of their game” will be more successful than individuals who do not. If I need the advice and assistance of a professional (medical, financial, legal), I would definitely be more interested in working with those who have continued to strengthen and sharpen their skills as often as possible. It is the same with real estate professionals – not all agents are the same – why not seek the advice and assistance of those who are more educated and have proven to be more successful at accomplishing your objectives.
In theory, Appraised Value and Market Value should be the same; however, in reality, that is often not the case.
Appraised Value must be determined by a licensed appraiser. The appraiser uses a set of standard criteria and processes that allows them to calculate the value of the home. Appraisers can use different methods or “approaches”:
1. Replacement approach – What it will actually cost to rebuild the property exactly as it exists in the current market of construction costs for material and labor.
2. Income approach – used for investment property and commercial property and establishes the value by the amount of financial profit the property owner can generate thru rental income.
3. Sales comparison approach – This is the most common appraisal method and the approach that almost every bank and lender requires appraisers to use when they are hired to perform appraisals to justify a loan. This approach uses recent sales data of properties that are located near the subject properties and are similar age, size, and in a similar condition. If any of comparison properties do not match exactly in some of these factors (i.e. not as many bedrooms, in a different neighborhood) the appraiser is supposed to make value adjustments accordingly to more accurately reflect the value of the subject property.
Although every appraiser is supposed to use the exact same methods and criteria, an appraisal is an opinionof value and if five different appraisers evaluated a specific property, more than likely, five different appraised values would be given. The main objective of an appraiser is typically to find the “highest possible value that can be justified for the property”.
In comparison, Market Value is simply defined as “the highest amount a reasonable buyer is willing to pay at this time”. The amount a buyer is willing to pay is determined by both measurable and emotional /intangible factors. Measurable factors consist of number of bedrooms, number of baths, size of yard, completely outdated, etc. Emotional or intangible factors are usually specific to individual buyer’s needs or family situation such as property is located near work or a particular school, property has lake access, property is has mature trees, etc. Both measurable and intangible factors can and do greatly affect what a buyer is willing to pay for a particular property. Just because an appraiser has an opinion about value, does NOT mean that a buyer will share that opinion and see value. Sometimes a buyer may actually be willing to pay more than appraised value because to them and their situation, the property is worth it.
If a property is appraised for $250,000 but the most anyone is willing to pay is $225,000, then at this time, the market value is $225,000. That market value may go up OR may go down depending on supply, demand, and the factors discussed above – the property is only worth what someone is willing to pay.