NY real estate appraisal experts Appraisal Source reveal a new trend in the real estate market. Previously only used by buyers, now home sellers are paying for their own independent real estate appraisals prior to putting their homes up for sale.

Homeowners have traditionally relied on real estate agents to guide them in the pricing of their home, while real estate appraisers are usually associated with the home buyer and their mortgage lender.

However, in these uncertain times when every dollar counts more homeowners are opting for the opinion of an independent professional real estate appraiser to help guide their critical pricing decisions, reports New York appraiser Appraisal Source.

Why is a correct home valuation so critical?

Most real estate professionals would say that pricing a home too high can be as damaging as pricing it too low. Sitting on the market for too long can make a property less appealing to potential buyers.

Choosing the right price can be a very difficult decision. The key is to find a balance between optimizing revenue while also still being competitive with the other homes for sale in the market.

It all starts with one important question: “What is my home actually worth?”

To sell a home in a reasonable period of time and get as much money for it as possible sellers need the most accurate possible answer to that question.

So, who should a seller trust to answer that question – a real estate salesperson or a real estate appraiser?

Traditionally, homeowners have turned to their real estate agent. But that is changing, as they realize that agents are not only less qualified to value a home, but it is also in their interests to sell the home for less than it is worth.

In most states in the U.S., a person with absolutely no real estate experience can become a fully licensed real estate salesperson in a matter of weeks, while it typically takes a minimum of 2 – 3 years for someone to become a fully licensed real estate appraiser.

Critically, while the average real estate agent sells less than 10 homes per year, an average real estate appraiser will typically value 200 – 300 individual homes over the same period.

The bottom line is that the average real estate appraiser is likely to have far better training and far more experience in property valuation than the typical real estate agent.

Are my agent’s interests aligned with mine?

It is easy to assume a real estate agent will naturally put the seller’s best interests first. A real estate agent works on commission, so they only get paid if their client’s home is sold. And the more it sells for the more commission they get. So surely the agent will push for the highest sale price.

Because of the commission structure in and between most real estate offices, even though you might agree to pay your agent a 5% commission for selling your home, in reality, they will often end up receiving as little as 1%.

Say a real estate agent prices and sells a house at $ 500,000.

With a typical commission agreement of 5%, the commission paid to the real estate agent is $ 25,000. But the listing agent’s office usually only gets half of that – so, $ 12,500 goes to the listing agent’s office and the other $ 12,500 goes to the office of the agent that brought the buyer to the house.

Further, the listing agent usually only gets about half of the money that was paid to his or her office (the rest goes to their broker). That leaves the agent with only around $ 6,250 – or 1.25% of the actual selling price.

What if the agent priced the same home for $ 520,000… $ 20,000 more than in the first scenario? The agent will only make about an extra $ 250 for earning the seller an extra $ 20,000.

In his paper How Much Value Do Real Estate Brokers Add? A Case Study Stanford economist B. Douglas Bernheim finds that…

Because the relationship between the homeowner and the broker resembles a classical principal-agent problem, the broker may not deploy services in ways that promote the sellers interests. (http://www.nber.org/papers/w13796)

“The truth is, there is little incentive for the real estate agent to fight to sell a home for its true market value. It is easier and safer for your agent to price a home beneath its market value, in order to make sure it gets sold and they get paid,” says appraiser Kevin Donegan. “That’s why we are getting more requests for home appraisals from homeowners than ever before.”

Source: Appraisal Source, Appraisal Source

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Now is the perfect time to start your real estate appraisal career. A licensed real estate appraiser is a necessary part of every real estate transaction – each year, countless people buy, sell or refinance their homes – and a licensed real estate appraiser is who they call. It’s a flexible, challenging and stable career that enables you to build a solid future.

Appraisal services are a vital part of the real estate process – no home can be sold without an appraiser. As a licensed real estate appraiser, you will play an integral role throughout the entire real estate field. Real estate appraisers estimate the value of property for a variety of purposes – to help determine a good sales price for a home, assess property tax, settle an estate or aid in a divorce settlement – meaning that there are many opportunities for your real estate appraisal career.

Real Estate Appraisal Career Outlook

Enter a profession that offers a positive outlook and long-term career potential. Employment of real estate appraisers is expected to grow as levels of real estate activity increase in markets across the country. This will lead to a greater need for licensed professionals to provide accurate and reliable home appraisals. Be ready for the opportunities ahead!

Employment of appraisers and assessors of real estate is expected to grow faster than average for all occupations – 17 percent over the 2006-16 decadeJob opportunities should be favorable for those who meet licensing qualifications and have several years of experience.More than 3 out of 10 were self-employed; salaried assessors worked primarily in local government, while salaried appraisers worked mainly for real estate firms

(Source: BLS)A Flexible Career Opportunity – Be Your Own Boss!

A real estate appraisal career affords you the opportunity to set your own schedule. You are not bound to a specific set of hours – arrange your real estate appraisal jobs at times that work for you. Enjoy flexibility in your life with a career that works around your schedule. You can also be in control of your career – you are in business for yourself, with the ability to make decisions about your future. Marketing, managing and growing your business are all up to you.

As a real estate appraiser, you can enjoy work in a variety of settings – you aren’t confined to a desk all day. Enjoy working outside and meeting new people on a daily basis. With a real estate appraisal career, each day is different – you will appraise different houses in different neighborhoods and interact with different people. One day might be spent in the field, while the next is spent in the office preparing your reports.You can choose to start your career overseeing and running your own real estate appraisal business. There are additional employment opportunities with private companies. A variety of clients use the services of an appraiser, such as lenders, insurance companies, attorneys, and property owners – a real estate appraisal career is needed nationwide.

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The real estate appraisal is done using various methods and the real estate appraisal values the property as different for difference purposes e.g. the real estate appraisal might assign 2 different values to the same property (Improved value and vacant value) and again the same/similar property might be assigned different values in a residential zone and a commercial zone.

However, the value assigned as a result of real estate appraisal might not be the value that a real estate investor would consider when evaluating the property for investment. In fact, a

real estate investor might completely ignore the value that comes out of real estate appraisal process.

A good real estate investor would evaluate the property on the basis of the developments going on in the region. So real estate appraisal as done by a real estate investor would come up with the value that the real estate investor can get out of the property by buying it at a low price and selling it at a much higher price (as in the present).

Similarly, real estate investor could do his own real estate appraisal for the expected value of the property in, say 2 years time or in 5 years time. Again, a real estate investor might conduct his real estate appraisal based on what value he/she can create by investing some amount of money in the property i.e. a real estate investor might decide on buying a dirty/scary kind of property (which no one likes) and get some minor repairs, painting etc done in order to increase the value of the property (the value that the real estate investor would get by selling it in the market).

So, here the meaning of real estate appraisal changes completely (and can be very different from the value that real estate appraiser would come out with if the real estate appraiser conducted a real estate appraisal exercise on the property).

A real estate investor will generally base his investment decision on this real estate appraisal that he does by himself (or gets done through someone). So, can we then term real estate appraisal as a really real ‘real estate appraisal’?