Which is a more accurate price range? from an independant appraiser or the comparison price you get from a realtor?

Asked by Darlene, Attleboro, MA Sat Mar 20, 2010

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Melissa Mancini’s answer
Melissa Manc…, Agent, Plainville, MA
Tue Mar 23, 2010
Hi Darlene,

I would say that they are both pretty close – if the listing agent is honest and doesn’t “inflate” a list price just to get the listing, which we see all too often in this market. Appraisers and Realtors have access to and use the same data when determining “fair market value”, although Realtors who are active have probably seen more homes that they use as comparables in person than an appraiser, so they are not just taking “data” from the MLS, public records or Banker & Tradesman into consideration. Unfortunately though, the appraiser has the final say. .

I determine my pricing the same way an appraiser would – although not all Realtors have the know-how to do this. I’m fortunate that my business partner is a licensed appraiser, so I know the values of the debits/credits they follow when say, comparing 2 identical homes in the same location, but one may need a new roof, or has a finished basement for example. So, when I conduct my CMA (comparative market analysis), I do it, “appraisal style”.

My pricing typically comes within 1-3% of the appraised value, but I am also taking active comparable listings into account to adjust for competition, days on market, etc, which an appraiser does not do.
0 votes
Matt Heisler, Agent, Westborough, MA
Sun Mar 21, 2010

I hope you enjoyed the nice little war of opinion your topic started. It's a really good question, and I figured I through in my 2 cents.

The answer is: It depends on the house.

I know, lousy answer. But here's why:
Appraisers use a numerical (math oriented) approach. That's a good way to value homes if the homes are A) typical in floor plan B) numerous in the target town C) without any "psychological" factors, such as steep lots, highway noise, poor curb appeal, tricky driveways or impeccable condition. D) Prices are stable, because appraisers use property comparisons that are 1-8 months old.

B) Realtors (at least, the good ones) all have their own methodologies, but we work with buyers, so we "see" property through their eyes, and are a lot more likely to realize that a typical appraisal value will come in too high or too low based on what the market will pay. Also, we tend to be more forward looking, because we live in the now, and not in the market of yesterday.

So, you see, each approach has its advantages. Certain houses will be much easier to appraise than others, certain houses will see the appraisal differ significantly, due to differences in the underwriter guidelines (which means different banks will force appraisers to evaluate the same property differently).

Regrettably, there is no "right" or "wrong" answer. At the end of the day, procuring a willing buyer determines market value.
Web Reference:  http://www.bjheisler.com
0 votes
Tom Lynch, Agent, Great Barrington, MA
Sun Mar 21, 2010

I think an experienced local realtor is likely to have a "pulse" on the market in your area and provide you with the most accurate "market value" of your home.


Tom Lynch
Associate Broker, Massachusetts and New York
Berkshire Property Agents
Great Barrington, Massachusetts 01230
0 votes
Darlene, Home Buyer, Attleboro, MA
Sun Mar 21, 2010
I ask the question because the property I am asking about was appraised in like October November for $60,000 less than what the realtor has comp it at. I offered the owner $10,000 more than the appraisal and was turned down. The realtor I am sure did not take into consideration it needs a new roof, sewer pipe is cracked etc etc. as well as I do know the appraiser was also un aware of the sewer pipe. The owner definatly thinks they will get the $60,000 more (or closer to it anyway) and I feel the way the maarket is what I offered is very reasonable.
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Susan Costa, , Westport, MA
Sun Mar 21, 2010
Definately the appraiser. They use formulas to get the most accurate account of your property.
A Realtor uses comps that are as close to you property as they can buy compaing sold properties in your area.
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Dave Dubak, Agent, Attleboro, MA
Sat Mar 20, 2010
What town's do the independent appraiser and REALTOR work out of ? If you talk to a local REALTOR he will have the most recent sales figures he can show you. He will also know the neighborhood. And if you hire a local appraiser he goes into the same system and uses the same homes to get the most recent sales as the REALTOR. What is your preference? Just have them show you the homes they are doing the comparison for you. Good Luck and if I can help please let me know!
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Heidi Zizza, Agent, Framingham, MA
Sat Mar 20, 2010
The appraisal! The bank determines the bottom line for the loan amount, however, usually the bank and the Realtor are very close to the same as they both get their information from recent sales.
Web Reference:  http://www.mdmrealtyinc.com
0 votes
J.M.Jones -…, , Massachusetts
Sat Mar 20, 2010
In my opinion, a trained Realtor has details on the up to date sales stats and makes an analysis based on that data - pretty damn close if you want to sell it that week.
An appraiser see only that banks value and we all know those differ greatly. But as basic a possible here is my ideas on it:

Realtors show what the market will bear for sell value (retail)
Appraisers show what the bank will finance (wholesale)

That is my general opinion - please read all entries to get a full scope of the answers possible.
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Dan Chase, Home Buyer, Texas City, TX
Sat Mar 20, 2010
The comps the realtors show you and the resulting price often get overruled when the appraisal comes in.

When the bank gets the appraisal done to determine the price no mortgage will be offered above that amount.

Which do you think is more important and accurate?
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Janet and Er…, Agent, North Attleboro, MA
Sat Mar 20, 2010
Local real estate agents generally have a better idea of the prices that homes will actually sell for. Plus its free to get a CMA from a local agent (or multiple to confirm price)! If we can be of help just let us know. Best of luck.
0 votes
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