Listing Appraisal Case Study 2: Chesney Downs, in Erdenheim
We were asked to appraise this property for a local realtor. He had already scheduled a listing appointment with the homeowner and wanted to have a better feel for what the value of the house might be given its condition.
He hadn’t seen the house but, was informed by the homeowner that it needed some work. The owner also had an opinion as to the value based on “conversations with other realtors.”
The agent arranged for us to inspect the house prior to his listing appointment. We conducted our regular inspection and also made note of any damage, deferred maintenance and potential FHA issues present at the house. We completed our appraisal and had the report delivered to the agent within 24 hours, in time for his the listing appointment.
Our appraisal report detailed a good deal of damage and deferred maintenance, at the house. We also identified a number of potential issues that might raise a red flag if a potential Buyer were to try to secure an FHA loan to purchase the house.
When the agent went to the listing appointment he had a good idea of what the listing price should be based on it’s “as is” condition. After pointing out the deficiencies with the property found in our appraisal, the agent and the homeowner decided that making some repairs to the house prior to listing would be the best strategy. He was also able to help the homeowner understand that the values quoted in their “conversations with other realtors” most likely did not take into account a true understanding of the house’s condition.
Rather than have a listing that would have languished or just attracted low-ball offers; the agent used the appraisal to help convince the homeowner that a “repair and remarket” approach would net the best price for the house.