Why is Negotiating Necessary if the House Sells for What it Appraises for?

If a house appraises for $X,000 and it sells for $X,000 then negotiating is kind of a mute point right?  Well, let's take a look at what an appraisal is.

First, an appraisal is an opinion of value. On the other hand, fair market value is the value a willing buyer and seller agree upon while neither of them are under any duress. Do you see the difference? Let me give you an example:  when I was first in the business over a decade ago I had an appraisal come in $20k lower than our agreed sales price. I explained to the buyer that this appraisal was 'an opinion of value' and fair market value may be $20k more. It took us another week, but sure enough we sold the home for $20k more with an appraisal that worked.

There is a misconception that appraisals are going to come in at a specific number which represents the unalterable price. This is false! It is common for a home to have several appraisals and all of them have a different value. These values could even be thousands of dollars apart.

I have seen appraisals come in much less than a home sold for.

I have also seen appraisals that were so far fetched that they wouldn't ever sell that high. The worst appraisals I've seen have come from refinance appraisals. These always seemed to have a value that wasn't realistic for fair market value. If you want to sell your home for more money you are not necessarily limited by an 'appraisal'. You are limited by what you negotiate.

Our Neighborhood Experts focus on a specific area so they know the fair market value. Their excellent negotiation skills and real estate knowledge will ensure that you get the best deal for your home.