The Importance of Listing Appraisals

Last week temperatures in the Philadelphia area flirted with 70 degrees.  Spring fever was definitely in the air.  People were out and about; and for a day or two everyone forgot that it was still February.  It got me thinking about the upcoming Spring Selling Season. 

Traditionally, Spring is when the Philadelphia real estate markets start to shake off the Winter sluggishness and things start to pick up again.  However, I can’t help but think this year may be different.  Given accumulating inventories, high unemployment, impending inflation and the lack of a tax credit, the 2011 Spring Selling Season could be a challenge.  Sellers and Agents alike will need to rethink their marketing strategies and pricing in order to be competitive enough to attract Buyers.

Pricing will be the key this Spring. 

For Agents, this year more that ever it will be important to make sure listings are priced to compete.  Not only will you have to compete with the older listings that are out there, you will have to go up against fresh, new listings that will be priced to move.  If you haven’t thought about getting a Listing Appraisal, now is the time to act. 

More and more, Agents and Sellers are having Listing Appraisals completed to aide their decisions about pricing and marketing strategies.  They realize that in this market not only do you have to price a house to sell, you have to price it so that it will appraise, as well.  Other Agents (your competition) are getting Listing Appraisals.  Frankly, if you are relying on the same old CMA these days, it’s like bringing a knife to a gunfight. 

Aside from helping to price a house properly, there are several benefits to having a Listing Appraisal done:

  • Demonstrates to the Seller that the Agent is committed marketing the house effectively
  • Sets realistic expectations for Seller
  • Provides Seller with an unbiased opinion of how their home compares to others on the market
  • Helps maximize the asking price without overpricing or under-pricing
  • Can help identify potential problems, repairs or issues present at the house that may cause delays or make the sale fall through
  • Gives the Agent/Seller an indication of how a potential Buyer’s appraiser may view the property which could have an affect on the Buyer’s ability to obtain financing
  • Can help reduce days on market, resulting in higher selling prices and possibly eliminate unnecessary negotiations 
  • Saves time, money and effort

Selling a home can be a very emotional process.  Perhaps the most important benefit of a having a Listing Appraisal completed is that it allows Agents to maintain client relationships without having to be the bearer of bad news.  The Appraiser is the one to present any unpleasant or “bad” news to the Seller.  The Agent is there to aide the Seller with interpreting the news and devising a strategy to sell their home. 

Listing Appraisals can also provide some level of defense against issues arising from the HVCC Guidelines; namely, appraisers who are unfamiliar with your market, inexperienced appraisers and appraiser who may not have access to the best data for your market.  The Listing Appraisal will provide a benchmark against which any subsequent appraisals can be measured. 

So, as the Spring Selling Season begins to heat up, it is time to invest in your own success and that of your Sellers.  Get a Listing Appraisal from a Certified Real Estate Appraiser.  For $300-$450 depending on the size and complexity of the property being appraised, Agents and Sellers can get a solid understanding of the value of a property and use that information as a tool to develop the best pricing strategy possible for the property. 

For more information on Listing Appraisals please contact The Coyle Group at 215.836.5500.


The Lanesborough

Purchase Decision – The Lanesborough, Rittenhouse Square, Philadelphia

This was an interesting appraisal assignment. We were contacted by a perspective Buyer to help determine whether or not he was going to purchase the condo unit that he was currently renting. The unit was located on one of the upper floors in the landmark Lanesborough Building in the Rittenhouse Square section, of Philadelphia.

The Lanesborourgh is a luxury residential condo conversion of a classic 1929 building. It is a very exclusive building with direct elevator access into each unit and only one unit per floor. Units are valued in the millions of dollars.  Personally, I think that it is one of the most elegant buildings in the Rittenhouse Square market.

Due to the limited number of units in the building, there were no recent sales to analyze. The most recent sales in the building were between 16 and 24 months old. But there were two listings in the building.

In developing our appraisal, we looked at current market sales and listings within the immediate Rittenhouse Square market. We focused our search for comparables to included units with similar square footage and amenities, as well as intangibles such as building prestige.

What we were able to find was that there was a market for a unit like the subject. We also found two current comparables from competing buildings that sold previously, in-and-around the same time as the most recent Lanesborough sales. This allowed us to see how the Lanesborough sales competed with comparable market sales, in Philly, at that time. By looking at the relationship of the prior Lanesborough values to the comparables back then, we were able to draw correlations and projections to the current values. The listings in the subject building and competing buildings also gave us indications as to the market trends over recent years.

In the end, we were able to present our client with a well researched appraisal that aided in his decision whether or not ownership in the prestigious Philadelphia building was right for him.