Should you hire an appraiser or a Realtor to assess the value of your home in its current condition?

Q: I know this may not be the right place to make this point, but after reading a ThinkGlink.com article about selling a house “as is” I wanted to share something for your team to consider.

Personally, having bought and sold a number of properties over the years, I would never trust a Realtor alone to tell me what needed to be done to a home to prep for sale. I always bite the bullet and first hire an independent appraiser.

This allows me to decide what really needs to be done to the property after the Realtors weigh in. It also offers a dose of reality in terms of my expectations around the sale price. Fixing at least some things before anyone came to the home to review it more than makes up the extra cost when the sale price is decided.

A: You have an interesting perspective on how to sell a home, not to mention quite a bit of skepticism about the process. Some of your skepticism is valid. There are some real estate professionals who don’t know what they’re doing. But many real estate agents, inspectors, and mortgage lenders are very good at what they do and provide a great service. We feel that when you find a great real estate professional, their opinion can, and should, count for something.

We want to focus on a couple of your comments. Let’s start with the whole idea of selling in “as is” condition.

Whether you decide to sell a home in “as is” condition, you’re really making a decision about pricing and being willing to accept a lower price instead of doing work that may be required. A homebuyer walking through a property will expect it to be neat and clean, with a fresh coat of neutral paint, clean carpets and floors. They will expect doors and windows to close properly and for the house to have been maintained over the years.

Selling a home in “as is” condition sends a signal to buyers that the house may not have been maintained as it should have been. We know that some homes will be sold in “as is” condition because they’re in disrepair and the owners can’t afford to make those repairs. In other cases, homeowners have died and their loved ones live far aware and are unable to make necessary repairs for sale. Buyers will expect to get a discount to compensate for the work that’s required to bring the home’s maintenance back to par.

The other issue you bring up is using an appraiser to give you a sense of your home’s value. You do this so you know what your home is worth before you talk with an agent. While that may have worked years ago, most appraisers today aren’t that familiar with a particular neighborhood. They may come from miles away. They’ll need to do the same kind of research as agents to come up with their fair market valuation of the property. In fact, they may call local agents to ask them about what they’re seeing in the area.

For this work, you’ll pay an appraiser around $500, if not more. Asking two or three agents to provide a comparative market analysis for your property will cost you nothing and will yield the same result. And, you’ll also have the opportunity to ask the agent questions about what they’re seeing in the neighborhood with respect to the level of activity, condition of various properties, and offers made, negotiated and accepted.

It seems that what you’re really saying is you don’t trust real estate agents to correctly assess the value of your home or make helpful suggestions about repairs and improvements before listing.

We think good agents know what the buyers want and what the market demands. We recently worked with an agent who knew exactly what had to be done to a property to get it sold. We followed her prescription and had multiple offers within a week. We then watched the same agent work her magic on another seller’s property in a different part of the city with the identical result.

Appraisers are great at reviewing market information, recent sales, and understanding the differences between homes to come up with the market valuation of a particular property. But most appraisers work for lenders. They come in after the contract is agreed to, so they know what the home is sold for and know all parties are interested (buyers, sellers, brokers and lenders) in meeting that number. We wrote about this issue several years ago.

And, while they can come up with a number on what a property is worth, they aren’t always right about how much someone is willing to pay for that property. We know some people that hired an appraiser for their home prior to listing it. The appraiser was not given a number that the homeowners thought their home was worth. The appraiser came back with a value of $800,000 for the home. The home later sold for $900,000. The sellers then asked the appraiser how he came up with the value of $700,000, the appraiser mentioned in doing research, he found comparable homes had sold for between $700,000 and $900,000 so he used the middle number.

Finally, many homeowners don’t know how to sell their home. And, by that, we mean they don’t have a good perspective on what maintenance, repairs or upgrades their home needs to compete in the market. We recently visited a home for sale that was owned by the same couple for 60 years. They had made improvements to the home over the years but the home didn’t have what homebuyers in that neighborhood pay top dollar for, like an open floor plan.

The owners needed to decide whether to sell the home “as is” or to make significant improvements. Their agent recommended they do nothing and the home sold quickly. Could they have gotten more by redoing the first floor? Perhaps, but maybe not enough to cover the cost of the remodel.

At the end of the day, you have to understand what is the true condition of your home and how it compares to other homes in your neighborhood, then hire the right people to help you understand local market conditions and the true value of your property.

You also need to understand that the hotter your local real estate market, the less you’ll have to do to prepare your home for a quick sale, as buyers will be more likely to accept a home with more issues if there isn’t a lot of choice. If the real estate market is slower, you may need to put more into selling your home by repainting the interior, staging the home, making repairs and taking care of minor repairs that make the home less appealing.

A good real estate agent can help. A great one will have a stable of talented, trustworthy professionals who can help get these jobs done quickly and efficiently.

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(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask (4th Edition).” She writes the Love, Money + Real Estate Newsletter, available at Glink.Substack.com. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)