If you’re thinking about selling your house then you are probably trying to figure out how much money your house will actually sell for. Part of that process is getting an appraisal (or valuation) on your home. So, if you’re wondering, “Can appraisals affect the selling price on a house in Myrtle Beach?” then keep reading…
When selling your house, you’ll be juggling a lot of numbers!
- There’s the asking price – the price you WANT to sell your house for
- There’s the offer price – the price a buyer wants to buy your house for
- There’s the appraisal or valuation – the price that a real estate professional (appraiser) thinks your house is worth
- There’s the selling price – the price that you will ultimately sell your house for
But first, let’s find out what an appraisal actually is…
What Is An Appraisal?
An appraisal is an educated guess. When you want an appraisal, the professional who gives you the appraisal will usually find the number based on what other comparable houses in the area have sold for recently.
They’ll look at several factors, including, but not limited to, the number of bedrooms or bathrooms, square footage, condition, age, etc. Then they will make adjustments to each property to more accurately compare them to yours and that will determine your property’s value. Of course, it’s just an educated guess based on research, and there are other factors that may influence the price beyond the appraisal.
What Does An Appraisal Do For A Seller?
The appraisal will highlight things you want to be aware of. It will show you what other people are willing to pay for a house and often what they consider to be important factors in the area.
The appraisal will then help you select an asking price that potential buyers seem willing to pay. For example, you might choose an asking price that is higher than the appraisal because your house is a better house, or you might choose an asking price that is lower than the appraisal because your house needs some work.
Can Appraisals Affect The Selling Price On A House?
Here’s the answer:
An appraisal can definitely affect your asking price but will more significantly affect the selling price. Let’s dive into the 2 reasons why someone would get an appraisal and find out how it can affect the selling price…
A seller is trying to determine what the asking price should be. The more closely a house is priced to market value, the better the chances are of the house being sold quickly and for the right price. If a seller is looking for the most money they can get in a reasonable time frame, they will most likely list their house for sale at around the appraised value or market value.
A buyer is financing the house and the bank is requiring an appraisal. This is actually the more common circumstance for getting an appraisal and it can cause you to reduce your selling price or squash the deal altogether. Most buyers that submit an offer to purchase a house include an “Appraisal Contingency”. Most, if not all, banks require an appraisal report before they approve the mortgage for the borrower. The bank wants to find out from an independent real estate professional how much the house is actually worth. They will only lend up to a certain percentage of the value of the house to the buyer. For example, if you accepted an offer of $200,000 for your house and the buyer was going to put down 25% or $50,000, the bank was going to lend them the remaining 75% or $150,000. If the house only appraises for $100,000, the bank will only be willing to lend $75,000 (75% of $100,000) to the buyer. The most likely outcome here is that the seller will have to reduce the selling price to match the appraised value, or the buyer can walk away.
The Bottom Line
The appraisal is a guide, an educated guess. But you should also be aware that the appraisal is not always correct. There are many factors that determine the sale price of a house, and an appraisal is only one factor. However, it can negatively affect the selling price.
Are you thinking about selling your house?
Why bother with an appraisal at all? Why bother with showing your house to a bunch of strangers, and waiting month while they decide whether or not they want to buy. You can get a fair all-cash offer from us to buy your house fast… and then you don’t have to worry about having an appraisal, or listing the house, or showing your house, or negotiating. Just pick up the phone and give our team a call at 843-732-3529 or click here now and enter your information into the form.