say your house was on sale for $1, would you buy it? Absolutely but how often does that happen?! Now let's say you want to sell your home and you put it on sale at $10,000,000.00 would it sell? Maybe but probably not.
appraisers come out to inspect a home and give it a value a lot of people think that they can just magically make a number appear that works for one side or the other. They believe that because a buyer is willing to pay X the appraisal value should come out
close to, if not right on whatever X is.
truth of the matter is that everyone has a different opinion of what that final X number should be. You could place 10 people in front of a home and ask them to give a price they would be willing to buy it for and you could easily have thousands of dollars
difference between the highest and lowest bidder. The job of the appraiser is to come in, look at everything and hopefully come in at a price that would be somewhere in the middle of those 10 numbers.
Even then though, it is not always that easy because the market is ever changing. Right now we are in
a sellers market through and through so the typical selling range is higher than normal. At some point this will change and we will be in a buyers market and then at some point after that we will be somewhere right in the middle but it will never last. So
when an appraiser is coming out they are looking for the market value, not just some made up number that looks good. Market value is defined as “…the most probable price which a property should bring in a competitive and open market”.
So yes, it may be possible to buy the house you want for an incredibly low amount and you may even get
lucky enough to sell a home for way above what it should be worth but it’s certainly not probable. And while it is nice to stay in the clouds of possibility for a little while appraising will always be the anchor that holds you to the probable.