Listing Price - Appraisal versus Realtor's Recommendation
My SIL is having problems determining a price for her home which is soon to be on the market. Here's the bare bones background.
My SIL is recently divorced. She and her kids moved out of the family home two years ago and left the ex-DH there. In this case, DH does not stand for Dear Husband.
Anyway, the divorce agreement calls for the house to be sold in AS IS condition with the pricing decision made with the ex-couple's joint agreement in consultation with a realtor. An appraisal was deliberately left out of the sales process outlined in the agreement.
Their realtor sells a lot in her area which was why she was chosen. She initially quoted a price around $650,000. Ex-DH feels it's worth a lot more because his appraiser friend gave him an "off-the-cuff" value of $849,000. The realtor now thinks the asking price should be around $730,000. Ex-DH won't go below $799,000 and is threatening to take my SIL to court if she won't agree to his price. Ex-DH believes that the house has an absolute value and the comps don't matter since the house is unique. His friend told him there are no comps for the property.
Ex-DH wants to formalize his appraiser friend's appraisal and wants my SIL to get her own appraisal. She'd rather stay out of court because she's supporting two kids with no child support from the Ex-DH and doesn't need the added expense. She has a call into her lawyer to discuss.
In her zip code, there are 8 months of inventory in the $700,000 price bracket and 10 months in the $800,000 price bracket. In the last 3 months, only three out of 180 sold homes have sold for over $700K in the zip code. The lower end of the market is brisk. We assess annually here at supposed FMV by law but FMV for assessment purposes is squishy. It's a 1964 colonial with a lovely two-story family room/master bedroom addition. However, the kitchen and baths haven't been touched since the house was built. The addition looks great but the main house is in sorry shape. The 2009 tax assessment is $580,000 which includes added footage from the addition.
I'm curious. So, what's the value of an appraiser's price versus a realtor's? This is not a lender's appraisal which a buyer will need but a pre-marketing appraisal. It is in everyone's best interest to get this house on and off the market but at a respectable price. I'm thinking the realtor is the expert in current market conditions. I'll be paying the appraisal bill if SIL goes that route. I've sold three houses without a pre-market appraisal. I think the notion of "absolute value" is crap and I'm concerned that pre-conceived notions my kill any deal once a buyer's bank appraisal is conducted. But I may be prejudiced since I'm footing the bill and I'd rather help their kids by paying for a summer camp.