Utah Real Estate #18: Why Is An Appraisal Necessary?

utah real estate, real estate utah, ut real estate, utah homes for sale

In this edition of the Utah Real Estate Podcast, we talked about:

  • The only thing that counts is the selling price
  • Building your value case
  • An appraiser uses the facts, and just the facts

Press the ‘PLAY’ button to listen to Utah Real Estate #18: Why Do I Need An Appraisal?

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YOUR CALL TO ACTION
If you’re looking to buy or sell a house in Utah, please call or text me (Patrick Wiscombe) at (801) 874-7717.
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Cool Voice Guy: Information you need, the podcasts you love, this is the patrickwiscombe.com podcast network.

Cool Voice Guy: Its real estate news you can use, this is the Utah Real Estate podcast, giving you free expert advice, and tips if you’re looking to buy or sell a house, and now, here are your hosts, Roger Zundel and Patrick Wiscombe

Patrick Wiscombe: The Utah Real Estate Podcast is brought to you by Weichert Realtors at the Rockies. If you are looking to buy or sell a house in Utah, please call Patrick Wiscombe at area code 801-602-5850. That number again area code 801-602-5850.

Patrick Wiscombe: It’s the Utah Real Estate Podcast, my name is Patrick Wiscombe. Coming up on today’s edition of the Utah Real Estate Podcast we’re going to be talking about things that are absolutely necessary to get your house sold; this includes the appraisal, the title report, and the home inspection. Joining me for the podcast, all the way from American Fork, Utah is Greg Hales, the Commercial Real Estate Manager at Weichert Realtors at the Rockies, hello there.

Greg Hales: Good morning, how are you this morning?

Patrick Wiscombe: Doing alright. Now I mentioned at the beginning of the podcast that there are three things that every piece of property needs to go through; the appraisal, the title report, and the home inspection. Let’s begin with the appraisal. Why is an appraisal necessary?

Greg Hales: Well I think the appraisal is now becoming the top of everybody’s list. With so many short sales and modified sales in your neighborhood, sometimes you’re not going to get the appraisal you think. I want to tell all of your listeners out there to forget about what someone is selling their home for. That doesn’t have any bearing on an appraisal. You can go up and down the street and say I know the Jones’ are trying to sell for this or the Smiths’ are trying to sell for this, that doesn’t count. The only thing in an appraisal that would help your appraiser is what a home sold for. It’s the only thing of value that they can base it on and they will only use that in their report. Now, an appraisal will take in a number of things. It will take in your square footage, the size of your lot, the age, the condition, number of bedrooms, bathrooms, garages, RV pads, etc. Then they will get a property that is similar to your property and then make adjustments, either pluses or minuses. So many times people will say, “I know the Smiths’ sold for this.” If you know that, then it’s not public knowledge. You need to let your appraiser know that. The ability to create a value based on a professional opinion, which is what an appraiser does, is only available through what sales are or what a home sold for.

Patrick Wiscombe: So the documented proof basically?

Greg Hales: Absolutely! California and a number of other states, I don’t know for sure right now, they use what they call a non-disclosure state. You don’t have to disclose what your home sells for. California uses it because that changes their tax base every time a home sells. There isn’t an appeals process or a subjective evaluation, which we use in Utah. It’s a factual and they only tax it based on what your home sold for. Utah is not that case. We don’t have to disclose what our home sells for thus the appraiser can only go off of information that’s gathered by what homes sell for.
Patrick Wiscombe: Where does he or she find that type of information?

Greg Hales: They will use the same services that the realtor uses. They use the MLS a lot. They’ll use word of mouth. Let’s say the Jones’ sold it on their own and you know that. They would probably go contact the Jones’ and ask, “Would you mind if I gathered some information on what it sold for?” They will also do title searches. They might pop up on a house that was sold and they can gather the information from there. Those are probably the three areas that they can gather their information.

Patrick Wiscombe: So the more information they have could either further the success in your case or potentially have a devastating effect it could it not?

Greg Hales: Absolutely. With so many short sales out there, the banks will disclose what they short the sale for. Particularly in my neighborhood, four homes were sold significantly below what people thought their homes were worth. As an appraisal goes through that neighborhood, they can only use what homes sold for. If banks are discounting it, it makes it tough. Be very careful, talk to your appraiser, talk to your agent, and make sure you get as much information to him as possible so they can find a value that is equal to what you’re either buying or selling the home for.

Patrick Wiscombe: Alright so what you’re saying is appraisers simply look at the facts. They look at what houses have sold for, not what you can get for it correct?

Greg Hales: That’s correct. Don’t get all worked up if somebody down the street is selling their house for 50,000 dollars more than you’re trying to sell your house for or buy that house for. An appraisal is not based on what people are selling for; it’s what it is sold for. Those are the only facts that an appraiser can go off of.

Patrick Wiscombe: Alright, so we’ll go ahead and wrap up today’s edition of the Utah Real Estate Podcast. For Greg Hales, the Commercial Real Estate Manager at Weichert Realtors at the Rockies in American Fork, my name is Patrick Wiscombe. You can contact me if you’re looking to buy or sell a piece of real estate within the state of Utah, Greg and I work together very closely. My cell phone number and text number is area code 801-602-5850, 801-602-5850. So for Greg Hales, I’m Patrick Wiscombe. Thanks for listening; we’ll talk to you tomorrow.

Cool Guy Voice: Helping you buy or sell a house, this has been the Utah Real Estate podcast, with your hosts Roger Zundel and Patrick Wiscombe, sponsored by Weichert Realtors, and heard exclusively on AtTheRockies.com

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