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Health & Fitness

Home Staging and the Appraisal

Home Staging helps you to get top dollar for your house but the appraisal can present a challenge. Here are some tips in case that happens.

Home Staging and The Appraisal

 We are in the middle of a thriving spring market here in Massachusetts and many Sellers are seeing huge benefits to pricing their homes right and presenting them well. This combination has helped many Real Estate Agents and Sellers create bidding wars, often leading to Buyers who are willing to pay more money than the list price. And in many cases Buyers are paying much more!

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Staged homes appeal to Buyers because, when a Professional Home Stager delves into the Buyer's mindset and helps the Seller present the home to appeal to the most amounts of Buyers, the rewards are dramatic. But this goes beyond moving some furniture around and "calling it a day". A seasoned home stager who understands Buyers will help the Sellers present their homes in many ways, actually "marketing" to their target audience. Some of the suggestions might include how to update affordably, traffic flow, maximizing the positive features while downplaying negative, how to draw Buyers into a room by the way it is decorated and so much more.

When Buyers can connect to a home and see themselves living in it, that is where the magic happens. If they don't feel as though they have to do a lot of work to update, etc., they are willing to pay a premium. After all, our lives are busier than ever and there is only a certain amount of time and money that Buyers are willing to spend to make the house work for them.

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 The challenge comes in when the house is being appraised. Appraisers use what is called comparables or "comps" when they are justifying a price for the bank or mortgage company. An ideal comp would be something that recently sold in the same town with the same square feet, same house style and same neighborhood. Since timing would dictate the availability of ideal comps, this is where other factors may come into play.

 Some of the things that you can do if a house does not appraise for the price that it is under agreement for are:

1) Make sure that your Real Estate Agent meets with the appraiser and provides good comps. It also helps if your Agent has information about pending sales that might "tip the scale". Appraisers are often from another area and they may or may not know the area you are Selling in. They do appreciate any insight you can give them. 

2) Make sure that you have a discussion with your Real Estate agent about the type of financing that the Buyer is getting. Generally, big national lenders may have stiffer criteria than some of the more local lenders. All appraisers have to go through a bureaucratic system now called AVM. It is an automated system that asks for certain criteria from the appraisers as far as comps, etc. What most people don't realize is that many Mortgage Companies  will have the underwriter scrutinize anything that doesn't pass through this system easily. For instance, some Mortgage Companies allow information like the fact that there were 8 offers over asking and others won't. 

3) If you still can't get the house to appraise, you can see if the Buyer can make up the difference in cash. Some Buyers want the house bad enough to do this. 

4)Last but not least, you can renegotiate with the Buyer for a reduced price. And hopefully you will have comfort in knowing that because you staged the home and priced it right, you got top dollar for what this RE market will bear.

The good news is that once some of these homes have appraised, it will set a precedent for others to use as comps. 

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