Dear Heather —

I would like to list my home for sale. I last had it appraised in 2009, but I know the market has dropped since then. Can you tell me what the right price is, or should I get an appraisal?

What’s it worth

Dear What’s it worth —

I would advise both, and here’s why:

If your home is priced incorrectly it could mean a long and tedious stay on the market, or a final selling price lower than the house is worth, or both. That’s why some homeowners are electing to pay the $600 to $1000 appraisal fee (depending on the size of the home). Our appraisal department has seen a significant rise in pre-sale appraisals recently.

Although most Real Estate Agents will often do an excellent job on their own comparative market analysis to price a property, the appraiser can come in with an independent, unbiased opinion to make sure the price is right. The greater attention to precise pricing is a change from a few years ago when a house could be listed at a lofty price to ‘test the market’. The current market is much softer and more competitive, and that approach definitely does not work.

Through the eyes of a buyer:

An appraiser will look at the home from a visual standpoint taking into account everything from location to repairs. He will also analyse the health of the current residential market, giving homeowners a personalised expectation of sales proceeds. A replacement cost approach can also be used, which can be helpful.

What the appraisal includes:

Your appraisal may range from 10 to 15 pages, depending on its scope. It should include details about the house, photographs, measurements, title, zoning, ARVs and assessment numbers, whether or not any portion of it falls under rent control, comparisons of similar properties which have recently sold, replacement value and notations of any obvious problems with the property that may affect the value.

Remember an appraisal is not a home inspection, home inspectors look for physical imperfections in the home, and note whether the structure is sound, what repairs are needed, the condition of the wiring, plumbing, etc.

What to look for before selling:

Form a checklist for elements to update or remodel; for example, a rotten or broken window or door, very loud paint colours (most buyers prefer neutral), overgrown or messy yard, very outdated bathrooms or kitchen. Spend some time reviewing — sellers might want to address easily curable issues before hitting the market.

An appraisal before your home goes on the market is a wise decision. An up-to-date appraisal will help accurately price the home. Sellers are sometimes shocked when their house appraises below the level they have anticipated. But better to go ahead with realistic expectations than spend months, sometimes years in a state of limbo having to prepare the house for viewing every now and then only to miss out on a sale.

Indeed, an agent who is vested in doing the best job they can to help an owner sell their property for best possible price, would have to wonder: if an owner is not taking the pricing of their property seriously, how serious are they about selling their property?

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Heather Chilvers is among Coldwell Banker Bermuda Realty’s Leading Sales Representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332 1793. All questions will be treated confidentially.