Krista Lancton is a partner at Market Elite Appraisals working in Houston.

Every week, we ask a real estate professional for their Short List, a collection of tips and recommendations on an essential topic in real estate. This week, we talked with Krista Lancton, a partner at Market Elite Appraisals, who shared her top 3 reasons to get a professional appraisal before listing a home.

3. Use the appraisal to set a realistic listing price for the home. Realtors do a very good job of providing their clients with accurate CMAs, or comparative market analyses, which shows the most recently closed sales that are considered comparable to your home. If the homes that are truly similar in size, age, quality, condition and location are chosen, then the Realtor can accurately derive a listing price. However, if you live in an area where no other homes have recently sold, or your home is unique in some way, it is highly recommended that you get an appraisal done by a certified residential appraiser who knows the market area where you live. Make sure you personally meet or at least speak over the phone with the appraiser so you can provide them a list of any improvements or upgrades you have made, which is a very important factor.

2. Having a pre-listing appraisal may prevent problems down the road. Many agents reading this can attest to the recent problem with low value appraisals coming in just before it’s time to close. When the HVCC came into effect, it prohibited lenders from having direct contact with appraisers. This resulted in the lenders using AMCs, or appraisal management companies, that have a pool of appraiser who are randomly selected to appraise whatever home is assigned to them. The problem is that many of these appraisers have limited training or are unfamiliar with the geographic area they are appraising. This in turn can easily cause an inaccurate and low appraised value. To prevent this from happening, you can provide the buyer’s appraiser with a copy of your pre-listing appraisal. The more experienced and well-qualified appraiser won’t be offended by this and will understand that being provided with the most information possible is always a helpful tool.

1. The size of the home may be inaccurate, which would cause a significant difference in value. Most often, a real estate agent will use the square footage that the county appraisal district has listed. Unfortunately, there is an extremely high percentage of homes that were not correctly measured, or even measured at all by the appraisal district. HCAD.org states that its exterior measurements are rounded to the nearest foot. Most appraisers measure to the nearest inch. You can see where there could be a huge discrepancy between the two. Also, the appraisal district does not see the interior of the home. Let’s say you have a two story home and from the outside the second floor looks the same as the bottom floor. The appraisal district will just double what they measured on the first floor and use that number as your square footage. In reality, when you walk in the front door and look up, your home has an open two story foyer and so does your family room.

The first problem with this scenario is that the potential buyer thinks they are getting a bigger house than they actually are. The second and most crucial problem is when the appraiser comes out to do a full appraisal on a home under contract, and measures the home to find it is 400 SF smaller than it really is. This will have quite a different appraised value than what was expected by all parties. The decision to get a pre-listing appraisal performed on the home could be one of the best decisions your buyer will make in order to have a smooth and successful real estate transaction.