This morning I read a blog post about how the seller should not list their property for more than it will appraise for, regardless of what you can get it under contract for.  I completely disagree.  I come from a little different perspective, as I was a certified residential appraiser for 15 years.  And, I know this will upset some of my peers in the appraisal business, and even some agents, but frankly, let the appraiser worry about the appraisal.

This is a hard blog to write, because I don't want it to come across as encouraging a seller to overprice their home.  That is never a good idea.  It will cause the home to sit on the market for months and eventually sell for less than if the home was priced right in the beginning.  But, the reality is that you don't get to pick the appraiser and two different appraisers can see the same house very differently from a value perspective.

Obviously, as the seller, you need to know if there could be some issues with the appraisal.  Your agent should be able to go over what the homes in the neighborhood are selling for and how your home compares with those.

With that said, it is always better, from the position of the seller, for the contract to apply upward pressure to the appraiser.  Few appraisers like to come in low.  And the first piece of information the appraiser gets about what your home is worth is the contract that shows what at least one person is willing to pay for your home.  And, while they may not be able to make the value you wrote the contract for, the reality is that if you try to worry about the appraisal before hand, you can leave thousands of dollars on the table.

Right now, the market inventory is low and interest rates are at historically low levels.  Buyers see that home values are still below the peak of the market.  And on top of all that, rental rates continue to go up and you can own the same house for far less than you can rent it.  All of this combines to allow sellers to get a premium for their homes right now, and often to get homes under contract for above what it will appraise for.

List the property for as much as you think it will go under contract for.  So, no, I am not saying list it over what the market will pay for it.    But, list it based on how it compares to other properties on the market and how it compares with the homes that have sold in the subdivision.

If the appraisal comes in low, the seller and buyer have options.  From a seller's perspective, they don't have to sell the property for less, but will probably be motivated to do so.  From a buyer's perspective, they have already invested an inspection and appraisal fee into the property.  This would be $700 on average.  Depending on their financial ability, and how much they desire the home, they may bring additional money to the table.  Or, concessions can be reduced such as closing costs.  The lender can adjust the rate upward a little to pay for closing costs.  This allows the seller to sell at appraised value and still get a similar net price.

To sum up, let the appraisers worry about the appraisal.  The seller and listing agents job is to represent the seller.  Most seller's priority is to put the most money possible in their pocket, so list it for what you can put it under contract for.    

First, congrats on shopping the rate.  That is a great first move.  Too many people overlook this altogether.  Loan officers are typically paid a commission by the lender to sell you a mortgage.  The higher the rate, the higher the yield split, OR commission for the loan officer. 

This is mainly focused at borrowers looking to buy a home.  However, anyone looking to get a mortgage of any kind would benefit to read through.

#1) Know that if you are purchasing a property, there is some risk if the mortgage company does not get the job done.  Real estate contracts have a closing date on them.  There is typically a seven day unilateral extension option on standard GAR contracts.  However, after that, your earnest money will be in jeopardy.  So, if your lender cannot close on time, you could lose the earnest money and the right to buy the house.

#2) Know that if you are shopping today and can't lock today, that you will need to shop again when you have the property to get the lowest rate.  Why? 

Well, first, there are some loan officers that will lie about what they can do today, so that they undercut everyone else you are talking to.  Suddenly, those other names go in the trash, and when you go to lock in the rate, they have no competition at that point.

Second,  there are times the lender is trying to 'buy' the market.  In other words, one lender may be less right now, but in two weeks, another one might be.  Lenders, like every other business have a maximum capacity.  When they get to that point, they may raise their rates a little to increase the margins to pay overtime, temp workers, or just to make it worth it to put additional stress on their system.  If a lender is slow, they may lower their rates just a tick to keep the loans coming in.

#3) There are direct lenders and mortgage broker.  A direct lender is a company that will be handling the entire process.  A mortgage broker has the ability to shop many different mortgage companies.  So, which is better?  A mortgage broker can often find the best rates.  (they may also use that to just put extra money in their own pocket)  However, mortgage brokers will often go with whatever company is giving them more profit for the lowest rate.  If it is a difficult company to work with and your loan may not get done in time, many of them don't factor that in.  Smaller direct lenders like Guarantee Mortgage and Brand Bank tend to have good rates and the ability to close on time, 99.9% of the time.  (Especially if you have a good loan officer.)  Larger banks are often the worst of both worlds.  I have one specific large lender that I would never advise anyone to use.  They nearly cost one of my buyers their earnest money TWICE.  I won't say their name, let's just call them Stank of Amerika.   If you are considering using a mortgage company that rhymes with this...reconsider.

#4) When you get locked, ask for a copy of the lock sheet.  Otherwise, the lender is playing roulette with your money.  They are hoping rates go down, so they can make more money.  Most, however, will not eat the difference if rates go up.  They will call and make up an excuse as to why your rate is different.  And, you may be two weeks into the process and need to close to save your earnest money and get the house you want.

#5) There are new regulations that will protect you somewhat compared to five years ago.  These keep loan officers from making a mint off of you.  However, that is very limited and there is a lot of wiggle room.

#6) And, this is very, very important.  If you intend to be in the house long term, especially if it is the entire term of the mortgage, shop by the APR.  The APR is the actual cost of the loan to you.  Lenders can charge points and fees, and all sorts of different things as profit centers.  A 3.5 interest rate with no points and low fees is most likely a better deal than a 3.375 interest rate with a 1 point origination fee.  The APR factors in ALL costs for the length of the loan.  This can make it MUCH easier to cut through all the fees and charges on the quotes.  

#6a) If you are planning to move in less than ten years, and the lower APR has higher fees up front, then you have more work to do.  If the lower APR has higher up front fees, then take the additional fees and divide it by the amount of money you will save per month.  So, if one payment is $25.00 per month less, but it costs you $2500.00 more to get the loan.  You will break even in 100 months.  So, if you plan on moving in less than 8 years, it would be smarter to go with the one that has the fewer upfront costs.  

Around this time of year, many start thinking that the real estate market slows way down and there is no point to having a home on the market.  Well, in our market, we do see a seasonality to real estate.  However, the dip in transactions has far more to do with fewer homes on the market than it does with not having enough buyers.

In a normal year, you will have less buyers in November and December. Your home will also have much less competition.  This year is not normal.  That is.... the inventory is so low and has been for months that there have been people looking since the middle of summer and just keep missing out on property.  Then, you still have buyers coming on the market right now and you have less and less competition.

Admittedly, listing a home during the holidays may be an inconvenience that you don't want to endure.  And, if that is the reason you decide not to list right now, it is understandable.  Just don't buy into the myth that you can't sell your home for full market price at this time of year.

I listed a home less than 30 days ago.  We basically had not showings for a week due to Thanksgiving.  It is now under contract.  AND, when it closes, it will be the highest sale in the subdivision in over a year.  (for those that think you have to deeply discount the price to get things sold quickly)

So, to answer your question... no, now is not a 'good' time to sell your home.  It is actually a GREAT time to sell your home. 

Admittedly, listing a home during the holidays may be an inconvenience that you don't want to endure.  And, if that is the reason you decide not to list right now, it is understandable.  Just don't buy into the myth that you can't sell your home for full market price at this time of year.  

National real estate statistics and the main reasons that sellers choose to move.