Dear Monty: I just bought my first home. I discovered at the closing that it was appraised for a much higher price than I paid. It is so much more that I'd like to know if I should resell it now.
Monty’s Answer: There is no exact price for a home. If you asked 10 appraisers for their opinion, there would be variation between the low and high opinions. The variation could be 30 percent or higher if the house is in a rural area and/or there are few comparable sales. Many home sellers see real estate agents as a commodity. This perception suggests that all agents will evaluate a home equally or very close. Based on my experience, many real estate agents need more skill or judgment to properly value a home.
Factors To Consider When Deciding To Sell
No. 1: The main intent of the purchase was to find the best house in the best place to live.- Pro: You may find a better house in the same or even a better place to live.
- Con: You may not find a better house in a similar or better place to live.
- Pro: If you hold the house for a certain period, you may qualify to defer your gain.
- Con: If you sell too soon, you will likely pay ordinary income taxes that may affect other income.
- Pro: You can repeat the potential big gain on the next purchase.
- Con: You could lose all or part of the current potential gain in your next purchase.
- Pro: It may take less time.
- Con: It may take more time.
Why Do Appraisers And Real Estate Agents Make Mistakes?
In addition to the conditions mentioned above, there is another reason evaluating property is difficult. This reason is beyond the property owner, an agent, an appraiser, and the lender’s control. The homebuyer is that reason. Many homebuyers have different weaknesses when they buy a home. The major issues are:No. 1: Emotions control their decisions.
No. 2: They’re either too busy or focused on less important issues. They are sometimes inexperienced or misinformed about how to act during a real estate negotiation. For most of us, these events happen only a few times in our lives.
No. 3: They are impatient. They have spent hours dealing with the process over the past few months and want to finish it, or they inherited impatience in their DNA.
No. 4: Other considerations are more important than price. Grandma or Grandpa live a block away, and a buyer will pay extra for the convenience. Or for senior buyers, grandchildren who live close by can influence their offer.
