Pre-Listing & Private Sale Appraisals
Independent Property Valuations Before Listing or Selling Your Home Privately
One of the biggest decisions you will make when selling a property is determining its value.
Price too high and you may struggle to attract serious buyers. Price too low and you may sell without fully understanding what the property could reasonably be worth in the current market.
Whether you are preparing to list your property for sale or have already found a buyer through a private sale, an independent real estate appraisal can provide a professional, objective opinion of market value before you make important pricing decisions.
Cade Appraisals Inc. provides pre-listing and private sale appraisals for homeowners, property owners, investors and other authorized clients who want an independent understanding of their property's market value.
What Is a Pre-Listing Appraisal?
A pre-listing appraisal is a professional real estate appraisal completed before a property is offered for sale.
The purpose is to develop an independent opinion of the property's market value based on the property itself and relevant market evidence.
Rather than choosing an asking price based solely on nearby listings, online estimates or renovation costs, a professional appraisal considers the characteristics of your individual property and how it compares with relevant properties that have actually sold.
A pre-listing appraisal may be helpful when:
You are preparing to sell your home
You are unsure what asking price is reasonable
Your property is unusual or difficult to compare
There are few similar recent sales
You have completed significant renovations
You have received conflicting opinions about value
You are considering selling privately
You want an independent opinion before speaking with potential buyers
Why Get an Appraisal Before Listing Your Property?
Your asking price is ultimately a marketing decision.
An appraisal does not tell you what you must list your property for, nor can it guarantee what a buyer will ultimately pay.
What it can do is provide an independent opinion of market value based on available market evidence.
Professional appraisers are expected to provide independent, objective and impartial valuation services rather than having a financial interest in a particular valuation outcome.
This can give you another source of information when deciding how to position your property in the market.
What Is a Private Sale Appraisal?
A private sale occurs when a property is being sold without being publicly marketed through a conventional listing process.
Perhaps your neighbour wants to buy your property.
A family friend may have approached you.
Your tenant may be interested in purchasing the home.
You may already know someone who wants to buy your cottage, investment property or vacant land.
The question quickly becomes:
“What is a fair price?”
A private sale appraisal provides an independent opinion of the property's market value so the parties have professional valuation information to consider when negotiating the transaction.
Why Is an Independent Value Helpful in a Private Sale?
In a conventional open-market sale, exposure to potential purchasers can help reveal what buyers are willing to pay.
A private transaction is different.
There may be only one potential purchaser, and the property may never be exposed to the broader market.
This can make determining an appropriate price more difficult.
An independent appraisal considers market evidence rather than the interests of either the buyer or seller. Market value analysis generally considers what a property would likely sell for under competitive market conditions with informed parties acting in their own interests.
The appraisal therefore provides a neutral reference point for the parties to consider.
Private Sales Between Family Members
Private property sales frequently happen between people who know each other.
For example:
A parent may sell a property to a child.
One sibling may purchase a family property.
A tenant may purchase from a landlord.
A neighbour may approach an owner directly.
Business partners may transfer real estate interests.
These transactions can be perfectly legitimate, but agreeing on value may be more difficult when there is a personal relationship between the parties.
An independent appraisal separates the property valuation from the relationship.
The appraiser's role is not to determine what price the parties must agree to. Instead, the appraisal provides an independent opinion of the real estate's market value for the specified effective date.
Pre-Listing Appraisal vs. Real Estate Agent's Market Analysis
A real estate professional and a professional appraiser can both provide useful information, but their roles are different.
A real estate agent may recommend a listing strategy based on the property's characteristics, competing listings, buyer activity and the seller's objectives.
An appraiser's role is to develop an independent opinion of property value for a defined appraisal assignment.
A pre-listing appraisal therefore does not replace the marketing expertise of a real estate professional.
Instead, it can provide an additional independent valuation perspective before you make decisions about pricing and selling.
How Is the Property's Value Determined?
A professional appraisal involves much more than simply looking at the sale price of the house next door.
Every property has characteristics that can influence buyer behaviour.
Depending on the assignment, the appraiser may consider factors such as:
Location
Neighbourhood
Lot size and configuration
Building size
Age and condition
Quality of construction
Renovations and improvements
Kitchen and bathroom quality
Basement finish
Garage and parking
Outbuildings
Views and privacy
Waterfront characteristics
Rural characteristics
Zoning and land use
Relevant comparable sales
Current market conditions
Other property-specific influences
The appraiser then analyzes the available market evidence to develop an opinion of value.
How Are Comparable Sales Selected?
Comparable sales are an important part of many residential appraisal assignments.
However, the closest sale is not automatically the best comparable.
An appraiser considers similarities and differences between the subject property and potential comparable sales.
Relevant considerations may include location, property type, lot characteristics, building size, age, condition, quality, improvements, basement, garage and other features.
The objective is to identify market evidence that provides meaningful information about the value of the subject property.
What If My Property Is Unique?
This is one situation where a pre-listing appraisal can be particularly useful.
Some properties are much more difficult to price than a typical house in a subdivision.
Examples may include:
Waterfront homes and cottages
Rural properties
Farms
Luxury or custom homes
Large acreage properties
Mixed-use properties
Investment properties
Commercial buildings
Vacant land
Properties with redevelopment potential
Properties with significant outbuildings
Homes with unusual improvements
When there are few directly comparable sales, additional research and professional judgment may be required to understand how the market recognizes the property's unique characteristics.
Do Renovations Increase My Property's Value?
Renovations can influence market value, but renovation cost and market value are not necessarily the same thing.
Spending $100,000 on renovations does not automatically increase the property's value by $100,000.
The appraiser considers how buyers in the relevant market respond to the improvements.
Updated kitchens, bathrooms, flooring, finished basements, additions and other improvements may enhance buyer appeal, but their contribution to value depends on the property, quality of the improvements, neighbourhood and market.
What If My Property Needs Repairs?
You do not have to renovate your property before obtaining a pre-listing or private sale appraisal.
A property can be appraised in its existing condition.
Deferred maintenance, dated finishes, structural concerns or required repairs may influence how buyers perceive a property and therefore may be relevant to the valuation.
This can be particularly useful if you are trying to decide whether to renovate before selling or sell the property in its current condition.
Can an Appraisal Tell Me Exactly What My Property Will Sell For?
No.
An appraisal is an opinion of value as of a specified effective date. It is not a guarantee of a future sale price.
An actual sale can be influenced by factors such as marketing strategy, exposure time, buyer motivation, seller motivation, competing properties, financing conditions and negotiations.
The purpose of the appraisal is to provide an independent, evidence-based opinion of value to help you make a more informed decision.
Pre-Listing Appraisals in a Changing Real Estate Market
Market conditions matter.
The value of a property is influenced not only by the house itself but also by the market in which it competes.
An appraiser may consider factors such as recent sales activity, supply and demand, market trends and other relevant conditions when developing an opinion of value.
This is one reason relying on an old sale or an outdated property estimate can be misleading when market conditions have changed.
More Than Just Houses
Pre-listing and private sale appraisals can be completed for many types of real estate.
Depending on the assignment, Cade Appraisals Inc. provides valuation services for:
Residential homes
Condominiums
Cottages and waterfront properties
Rural properties
Farms and agricultural properties
Rental and investment properties
Multi-residential properties
Commercial properties
Mixed-use properties
Vacant land
Development properties
Unique real estate
Frequently Asked Questions About Pre-Listing & Private Sale Appraisals
Should I get an appraisal before selling my house?
It isn't required for every sale. However, a pre-listing appraisal can be useful when you want an independent opinion of market value before establishing your pricing strategy.
Can I get an appraisal if I'm selling without a real estate agent?
Yes. An independent appraisal can be particularly useful in a private sale because the property may not be exposed to the broader market before the parties negotiate a price.
Can both the buyer and seller see the appraisal?
Who can rely on or receive an appraisal depends on how the appraisal assignment is established, including the client and intended users. If both parties are expected to rely on the report, this should be discussed with the appraiser before the assignment begins.
Is an appraisal the same as an online home estimate?
No. A professional appraisal considers the specific property, relevant market evidence and the requirements of the appraisal assignment.
Does the appraised value have to become my asking price?
No. The appraisal provides an opinion of market value. The seller ultimately determines the asking price and selling strategy.
Will a buyer's bank accept my pre-listing appraisal?
Not necessarily. Lenders may have their own appraisal requirements and may require an appraisal to be ordered through their own approved process. Your pre-listing appraisal should not be represented as automatically satisfying a future buyer's lender requirements. Your own site already appropriately advises clients to confirm lender requirements before privately ordering a financing appraisal.
Can you appraise a private sale between family members?
Yes. An independent appraisal can provide a neutral opinion of market value for the parties to consider when discussing a private transaction.
Sell With a Better Understanding of Your Property's Value
Selling real estate can involve one of the largest financial decisions a property owner makes.
Whether you are preparing to list your property publicly or negotiating a private sale with someone you already know, understanding the property's market value can help you approach that decision with better information.
Cade Appraisals Inc. provides independent pre-listing and private sale appraisals based on property-specific research, relevant market evidence and professional valuation analysis.
Need a Pre-Listing or Private Sale Appraisal?
Contact Cade Appraisals Inc. to discuss your property and appraisal requirements.