Selling Your Charlottesville Horse Farm And The Appraisal
There are many things that can derail a contract in today’s real estate market and one of these things is the appraisal. When we are pricing a Charlottesville horse farm to list not only do we need to consider whether it is a price that a buyer will make an offer on but also if we get an offer will it be able to appraise for the sale price. Many sellers don’t really understand the appraisal process and how crucial it can be to a successful sale.
One of the first things that a seller needs to understand is that when we talk about appraisals we are not talking about replacement cost. Unfortunately the cost to build your home now is not what an appraiser will look at. What they are interested in is market value. Fair market value is defined as what a ready, willing and able buyer will pay for the property. To determine this an appraiser will look strongly at recent sales of what they determine to be comparable properties. Then they will make adjustments up or down for age, condition, square footage, and additional features. The appraiser usually will not have been in these comparable properties but will look at the tax records, mls sheets, and will often call the listing agents to get their information. They will visit your property. The purpose of the appraisal is to assure the bank that is making the purchaser’s loan that if they have to foreclose they will be able to sell the home at the price that the buyer has paid for it or at least for the amount of the loan. They prefer the comps to be in a close radius to the subject property; in this market there are often not enough sold comps close by and then they may go into adjacent counties and will adjust price up or down accordingly to the different markets. If there are not good comps they struggle.
To justify the sale price for your Charlottesville horse farm it is often helpful for the listing agent to give the appraiser paperwork, such as comparable listing sheets, or some kind of figures showing how the list price was arrived at. They may or may not look at this information but it can help. You have to be able to make a case on paper to back up your price.
Remember if your farm does not appraise for the sale price the purchaser may not get their loan especially if they are using an FHA or USDA loan. In order to keep the sale together you will need to renegotiate the price to meet or be under the appraisal.
Price your equestrian property correctly the first time, sell it quicker and avoid appraisal issues.
Copyright 2012 by Pam Dent all rights reserved “Selling Your Charlottesville Horse Farm And The Appraisal“.