Anytime a house sells to a buyer who is financing their purchase, the lender will require a third-party appraisal to verify the property’s value and determine what they’re willing to lend. As a separate matter, sellers also have the option to get their own pre-listing appraisal to set an asking price. This begs the question: Should I get an appraisal before selling my house?
Is it even the best way to price a home? When might a pre-listing appraisal make sense?
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Enter a few details about your home, and we’ll provide you with a preliminary estimate of value in less than two minutes. This won’t replace a comparative market analysis (CMA) or home appraisal, but it can be a helpful starting point.
While an appraisal is one method of assessing home value, it isn’t the typical way to decide on a listing price. Usually, a top real estate agent’s comparative market analysis (CMA) is all you need to gauge what a buyer is likely to pay for your home, saving sellers between $300 and $500 in extra expenses if they order an appraisal.
Moreover, a CMA reflects your area’s current real estate market conditions. And you can always get a free online home value estimate as a starting point. However, certain scenarios may justify obtaining a pre-listing appraisal. In this guide, we cover what those special circumstances may be so you can make an informed decision.
You’re selling without an agent
If you’re selling your home via for sale by Owner (FSBO) and handling the entire transaction without a Realtor, you need to be more mindful of the home’s pricing. Without expert guidance, it’s easy to overprice and scare off buyers or underprice and leave money on the table.
An appraisal gives you a clear, professional valuation so you can list with confidence. Buyers might also take your listing more seriously if you can back up your price with an official report.
Since FSBO sellers handle everything themselves, having an appraisal can help during negotiations, especially if a buyer tries to lowball you. It also saves time by giving you a solid starting price instead of guessing. Getting an appraisal before selling FSBO makes the process smoother and helps you price competitively.
Your home hasn’t been appraised in years
If it’s been a while since your home was last appraised, a lot could have changed in the market. Prices might be higher or lower now, and important selling factors like interest rates, neighborhood trends, or new developments may have affected your home’s value.
Getting an appraisal gives you an up-to-date idea of what your home is really worth in today’s market. Without it, you might risk pricing it too high or too low, which could lead to it sitting on the market longer than you want or missing out on good offers.
Pros of getting an appraisal before selling
Ordering a pre-listing appraisal doesn’t just help you set a listing price. It can also give you several other advantages that make the selling process smoother and more strategic. Below are three key benefits that homeowners often find valuable when they choose to invest in an appraisal.
You gain a stronger negotiating position
Having an appraisal report in hand gives you a professional, third-party opinion of your home’s value. This can serve as a solid backup during negotiations if a buyer tries to lowball you.
Instead of relying on emotion or guesswork, you can point to a certified appraisal to justify your price. Buyers may be less likely to push too hard if they see that a licensed appraiser has already verified the value. While it won’t eliminate all negotiations, it does give you more leverage and confidence when discussing offers.
You identify potential issues early
An appraiser looks at more than just square footage and location. They also note the condition and features that affect value. If they find concerns, like an outdated system or needed repairs, you’ll know before buyers do. This early knowledge gives you the chance to address problems and make repairs or adjust your expectations ahead of time.
By resolving these issues upfront, you avoid last-minute surprises that could derail a deal. It also helps you present your home more transparently, which builds trust with buyers.
You create a smoother selling experience
When you understand your home’s value and any factors affecting it, the selling process becomes less stressful. You’ll spend less time second-guessing your price or worrying about what buyers might say.
Having a clear, professional appraisal report often helps align expectations between you, your agent, and potential buyers. This can lead to faster decision-making and fewer back-and-forth conversations about value. In the end, it allows you to move forward with more confidence and less friction.
Cons of getting an appraisal before selling
If you decide to get an appraisal before selling, you should be aware of the following:
You pay the appraisal yourself
With a traditional lender’s appraisal, the associated fees are typically the buyer’s responsibility. But if you’re ordering your own appraisal before listing, you’ll have to cover the cost yourself.
According to Brenan, the cost of an appraisal is determined in the open market and can vary widely based on the property type and the complexity of the assignment.
“For homogenous properties in markets with considerable recent sales data, an appraisal could be anywhere from $350 to $750, or even higher,” he says. “As the complexity of the assignment increases, the appraisal fee will generally follow.”
Taflinger says that most appraisals in his Indiana market are in the $400 to $500 price range, but for homes with very unique features, horse farms, or commercial properties, the cost can escalate to around $2,000.
Meanwhile, the latest National Association of Realtors (NAR) Appraisal Survey found that the typical cost to complete an appraisal is $500 to $599.
Your home’s still subject to the lender’s appraisal
“It’s important to understand that a lender could not use a pre-listing appraisal to make a loan decision for a potential homebuyer because the law requires lenders to engage appraisers directly in lending transactions,” notes Brenan.
Two appraisals can result in two very different numbers, so your lender-ordered appraisal could still come in lower than the value assigned by the pre-listing appraisal. In other words, no matter what happens with your pre-listing appraisal, a lender will still order their own third-party appraisal to determine how much they’re willing to lend the buyer.
If the appraisal comes in under the contract value, that difference will need to be made up somehow. The buyer can bring extra funds to the table, you can reduce your price, or you can negotiate a compromise somewhere in the middle. Or, the buyer can invoke their appraisal contingency and walk away from the deal altogether.
You could underprice or overprice as conditions change
Real estate markets can change in just a few weeks due to factors like interest rate adjustments, seasonal demand, or shifts in local inventory. A pre-listing appraisal provides a snapshot of your home’s value at one point in time, but that figure may not hold if the market moves up or down shortly after.
For example, if buyer demand suddenly rises, your home could be worth more than the appraisal suggests, potentially causing you to underprice it. On the other hand, if conditions soften and supply grows, the appraisal may give you an inflated sense of value, making it harder to attract offers.
This timing mismatch means that while an appraisal can be useful, it shouldn’t be the sole guide for pricing in a dynamic market.
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