By Joshua Huff, Sponsored Content
You are on the market for a new house. You find one that you love in a great neighborhood within a great school district. The fit seems perfect; however, you happen to have the misfortune of shopping for a house during an intense seller’s market.
The odds of you landing that house suddenly turns against you as a bidding war erupts.
The list price of the house is $250,000. You go in $10,000 over with an added concession that you are willing to go higher than any other offer. You want the house that bad.
It works.
You come out on top with a winning bid of $260,000.
Yet is the house worth that price?
Cue the entrance of Pierce Home Appraisals. Helmed by Renee Pierce, the business has been in existence since 2009 and serves the greater Birmingham metro area. Pierce’s expertise lies within the determination of a home’s fair market value. That process includes an on-site inspection and a deep dive into “comparables,” which simply compares the selling price of similar houses within the area.
“People can be very knowledgeable about their market; however, our job is to protect the public that you’re not overpaying for property and that the lenders aren’t lending too much money – overextending themselves with their assets as loans,” Pierce said.
Houses tend to fly off the shelf within a seller’s market. That is why understanding the appraisal market is so important. In essence, a bank will hire an appraisal company like Pierce Home Appraisals to get an accurate value of the property so that it matches what a buyer is willing to pay.
An appraisal does not just protect a lender. It also protects buyers. An appraiser can discover problems that were not found when looking through the home the first time. This is made easier as an appraiser is well versed in the area that the home is located in. If a house sits in a neighborhood downwind from a paper mill, the appraiser will know that and adjust the house’s value to reflect that information, which is something that an appraiser unfamiliar with the area will not know.
Though licensed by the state, Pierce’s geographical competency is narrowed down to four counties: Jefferson, Shelby, St. Clair and Blount.
“I can’t do an appraisal in an area that I am not familiar with,” Pierce said. “I’ve always done those four counties. I’ve done more, but I don’t feel comfortable that I was able to produce a good report because I didn’t really know the area well.”
So, what do appraisers look for in a home when determining a house’s true value?
The condition of the home is the number one thing, Pierce said. Though major issues are glaringly obvious, it is the minor problems such as rotting wood and peeling paint that can impact a home’s value.
In fact, Pierce added, those minor problems cause her to “start looking harder at everything.”
In addition to the condition of the home, location and size play a huge factor in the value of a house.
“The biggest thing is maintaining (the home),” Pierce said. “Those little minor things all add up. If I am going to buy your house, I am not going to want to pay top dollar and have to pay all these little minor repairs, as well.”
A lender typically selects an appraiser to determine a home’s value, but the fee is covered by the buyer as part of the closing cost. Pierce Home Appraisals charges between $450 to $550 for an appraisal. The fee varies between the type of appraisal, the location and the size of the home.
For more information, you can contact Pierce at (205) 337-7244.