One of the benefits of obtaining a prelisting appraisal is to verify the square footage and avoid embarrassing and costly mistakes that cause deals to vanish and attorney’s to appear out of thin air.

 

For decades, I have asked sellers to obtain an independent appraisal at their expense as part of the listing due diligence. It is also a litmus test to see if the seller is ‘serious about selling’ and willing to invest some funds, and divest some ego from the pricing process.

 

Recently, I listed a two story basement home that the owner said was 5800 sq ft. The tax assessor confirmed this figure, and it was listed on a prior MLS plano. The seller was reluctant (too cheap & smug) to obtain an appraisal. The property eventually sold and appraised about 100k below the list price and 75k below the contract price.

 

The seller was certain his prized possession would appraise for “At least 500k”. He told the buyer and both agents that he felt the property was “Lucky”. This is one of the reasons Feng Shui drives me crazy. Lucky is a great name for a dog or a cigarette, but not a property.

 

The appraiser said this ‘lucky’ property had 4976 sq ft not the 5800 the seller claimed. Once again, real estate confronts reality. The buyer did not want to pay above appraisal and went looking for another home. The seller is considering an independent appraisal in hopes of justifying his elevated expectations.

 

Years ago I read about a lawsuit where the buyer successfully sued the seller because the house he purchased had more square feet than was stated. Most buyers would be elated to get more for their money; but, not this buyer. His attorney alleged the buyer would have more taxes to pay, higher utility bills, and higher insurance premiums. The judge agreed with the plaintiff.

 

There are dozens of great reasons to obtain prelisting appraisals. Avoiding the ‘shrinking house syndrome’ is one of them. Staying away from litigious buyers is another.