It is important for both buyers and sellers of real estate to understand the importance of an appraisal.  Let’s face it, the real estate market has been nothing if not erratic over the last few years and knowing exactly what a home is valued at is trickier than ever.

The clear answer to value is that a home is only worth what someone is willing to pay for it, but when you are trying to finance a home the bank will only lend based on what it sees the value of the home being. When you list a home you have to convince the buyer, buyer’s agent and appraiser.  Maryland properties have been a bit more difficult to establish value since the inventory has not been as large. DC and Virginia have had a bigger inventory and Northern Virginia has had 3 big price reductions within the last 3 years so sellers are more realistic.

I can be helpful for sellers to have an appraisal done on their property? But that does not make sense for all neighborhoods. U Street, Shaw, Logan, Dupont, Kalorama, Woodley, Georgetown, American University, Capitol Hill, Arlington, Alexandria and Bethesda are very strong markets and it is easy to decide on price if the real estate agent knows the market soundly.  Foreclosures and short sales have skewed the comps in many areas outside of the beltway and in depressed neighborhoods, which can make placing an appropriate value difficult.

An appraisal will let a seller know realistically what he can expect to get for his/her home.  If he prices a home too high and someone jumps at that price, great, but will the deal fall apart when financing cannot be achieved because of a low appraisal? But appraisals are not always the answer. There are a lot of appraisers out there and they all have good days and bad days. You can have 3 appraisals on 1 property and they may all come in at different prices.

However, preparation is key when trying to sell real estate in today’s market, where knowing what your local fair market value is of the essence.

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