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The numbers are falling, the numbers are falling! When that happens, for buyers, sellers and agents it certainly seems like the sky is falling too. With inventory scarce and sellers getting their pick of the offers, a botched appraisal can take a deal permanently off your books and send your clients into orbit! What’s the best defense against this potential mess? As always, its a great offense! We have 20 strategies designed to help you assess if the appraisal is going to be a menace and how to prevent (and save!) your deals from an untimely, disastrous end!
Let’s set the tone with a great quote from astronaut, Chris Hadfield. He says, “In my experience, fear comes from not knowing what to expect and not feeling you have any control over what’s about to happen. When you feel helpless, you’re far more afraid than you would be if you knew the facts.”
Isn’t that the truth? If so, then why do so many agents either bury their heads in the sand or go on a wing and prayer that the appraisal will work out in their clients favor? Here are the three questions we want to answer in this series:
How will you know there’s an appraisal issue on the horizon?
What should you know in advance to prepare?
What should you do to prepare?
First, let’s look at how to uncover the early warning signs of trouble, aka mistakes you made that contributed to this problem:
- You priced the home based on the one or two significantly higher sales…even though there are more recent sales that did not achieve that price.
- You priced the home based on recent comps ‘plus’ accounting for appreciation and a crazy market. Hmmm…you picked now to be gambler?
- You don’t actually HAVE any comps, due to lack of recent sales or lack of similar enough sales. This is also known as guessing and you guessed high.
- You priced it based on what the seller ‘needs’ versus what the comps tell you. We call this ‘seller pricing.’
Listen to the full episode today to receive more insights on these and also the rules on what you should know in advance of the appraisal so that you’re never caught off guard!
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