Should I get my house appraised before I sell it? The short answer is no. The longer answer is you could but it won’t take the place of the appraisal that the buyer’s lender will order. The market analysis or CMA from a Realtor isn’t the same as an appraisal but it is similar in that we compare the house to three others that are nearby, similar and that sold recently.
The appraisal is part of the underwriting process for the home loan. Lenders need to make sure the house is worth at least as much as the loan amount. Appraisals are not an exact science. I have seen a few that don’t look like science at all.
Homeowners should also be aware that if buyers bid over the appraised value they will have trouble getting the loan approved unless they have a large downpayment. Unfortunately, we see a lot of offers where the buyer has a 5% downpayment but they end up bidding more than 5% over the asking price. Usually, such offers are rejected.
I usually advise against paying more than the appraised value for a house but there are circumstances where it makes sense. If the property is affordable and the buyers plan on living in it for a decade or more it might make sense.
