Foreclosure in Roseville>Question Details

Gretchen, Both Buyer and Seller in Roseville, MN

Appraised value versus listing price?(in Roseville, MN)

Asked by Gretchen, Roseville, MN Mon Dec 31, 2007

I have a 1946 1 1/2 story Roseville, MN home that is updated kitchen,bathroom, attic turned 400 sq foot bedroom, A/C, carpet, plumbing, etc. My appraisal value was $260,000 last year before I got new A/C & remodeled 1st floor bathroom. What can I expect as a reasonable selling/listing price? Negative feature is the busy street I'm on.

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Michael and Jason are right. In my own experience, I received an appraisal during refinancing two years ago that was for $270,000... if I could have sold it for $250,000 I would have been excited then... today I'd be absolutely ecstatic!

Mechanicals such as air conditioning are expected to be in working order so the increased value is minimal. Updating the 1st floor bath can be of great benefit if it was very dated but typically return 100% of its cost at resale.

The biggest difficulty I'd envision is the busy street. With so much inventory on the market today, you've got to significantly distance yourself in price from the other comparables that are not on busy streets. I live on a busy street myself and I believe it will be a challenge when I go to sell.

Sight unseen, no agent can give you a good estimate of its current value... have a few of us out to give you an opinion.
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2 votes Thank Flag Link Mon Dec 31, 2007
One dirty little secret--which Jason touched on--is that appraisals made for refinancing purposes in 2005, 2006, and even early 2007 were often greatly inflated. That's one of the factors that's led to the wave of foreclosures. People actually thought--based on an appraisal--that their homes were worth $X, only to find out that they were worth only 90% of $X, even at the top of the market. So they refinanced, took out all that supposed equity, and now they try to sell. Their house was only worth 90% of $X, prices have declined by 5%-15% or more, and the expenses of selling a home are another 8%-10%. That's why they're so upside down. But let me climb off my soapbox....

So, forget the appraisal. And, as Aaron notes, people expect working AC, just as they reasonably expect a roof that doesn't leak, wiring that won't burn the house down, plumbing that drains properly--stuff that can cost lots of money to fix or update, but won't add much if any value to your house.

Get listing presentations from three competent Realtors. See what they think your house is worth. Also, find out what improvements they'd suggest to either add value or sell your home quicker. Also, pay some money for a home stager to give you her/his opinion on what should be done. There are ways to minimize a house's negatives and to maximize a house's positives.

Good luck.
1 vote Thank Flag Link Tue Jan 1, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
Gretchen, interesting question. I am sure many are wondering the same thing. There was a time when appraised value and selling price did have a close corallation, however today, all that has gone out the window. I have sold homes that sold for far more than appraised value and also, sold homes that were far under that. There isn't rhyme or reason to it. In a review of your appraised value, go to the county tax records and look at those that are around you, and if you're on a busy street, try to use like properties, and look at what they appraise at. They should be close, if they are reasonably similar. If not, you may have a good case to go to the county to have it re-appraised, which may help with your tax burden.

In today's market, the relevance of sale price to appraised value just isn't there.

Todd Norsted
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1 vote Thank Flag Link Tue Jan 1, 2008
I would suggest you have two or three Realtors do a market on your home. The appraised value can vary widely from actual market value. I'm sorry but without seeing the home I can't give you an accurate list price.
Michael Doyle
1 vote Thank Flag Link Mon Dec 31, 2007
I'm not sure how Roseville is for this specific topic, but I know that the St Cloud market still hasn't tightened up on refinance appraisals to make them more accurate. For example, I recently refinanced one of my rental properties. I know that this single family home is worth about $110,000 (and that is on the high side). My appraisal came in over $125,000 (almost 14% over market value). If I wanted to, I could pull out this "equity," but I know that I would immediately be upside down in that loan.

What you want to do is ask several real estate agents to perform a CMA on your home. When they present you with their market values, try to forget what your appraised amount was before. Just really listen to what they are saying for a market value and what their reasons are for their prices. That will get you the most accurate and up to date market value on your home. Best of all, it's generally free to get several CMA's from different real estate agents.
1 vote Thank Flag Link Mon Dec 31, 2007
I am a realtor who lives and works in the Roseville area and have recently priced and sold several homes in and around Roseville. What I'm seeing is a decrease in appraisals done a year ago. That doesn't mean your house is worth less, it only means that in GENERAL appraisals are more realistic to what is currently SELLING. Please contact me if you'd like a free CMA.
0 votes Thank Flag Link Wed Aug 5, 2009
As several have pointed out, if the appraisal was done for a HELOC, it's probably high. As others have said, buyers expect new baths (and kitchens) and AC nowadays. Take that information into consideration and have a few realtors do a market analysis on your home.
0 votes Thank Flag Link Tue Jan 1, 2008
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