Should I Get an Appraisal Before Selling My House Or Will a CMA Work?

Special cases for when you should get an appraisal before selling your house

If your property has one or more of these characteristics, you may want to look into getting a pre-listing appraisal:

The house has unique features that are hard to value

In an area where the houses are all similar, it’s easier to find comparative sales or “comps” to identify a home’s price range and then adjust the value up or down according to whether it has an extra bedroom or fewer updates.

But for homes with unique features — like a detached in-law suite, tennis court, generator, solar roof panels, or even a basement bowling alley — it can be tougher to predict how the market will react. And you’re unlikely to find recent sales of properties with those same characteristics as a benchmark.

“If the unique features are bells and whistles that aren’t common to a house, then it may be more of a ‘nice to have’ than a ‘must-have,’” says Nick Ron, CEO of residential real estate investment company House Buyers of America. “Those types of items are hard to price.”

Take the home of one Indiana seller that was significantly larger than other properties in the area. As a pole barn with living quarters above it, the residence couldn’t easily be compared to neighboring properties, shares Brad Taflinger, a top real estate agent in Muncie, Indiana, with over 36 years of experience.

The homeowner, Taflinger’s client, built the house and garage. He had a sentimental attachment to his work and the craftsmanship.

“His price and my price were polar opposites,” Taflinger recalls. “In that case, I suggested that it would be best for him to contact a licensed appraiser before listing.”

Rural location

A CMA evaluates the subject property by comparing it to nearby homes with similar features built around the same time and recently sold or gone under contract. This data is readily available in suburban or urban areas and even more so in planned development communities with plenty of market activity to pull from. But, in remote locations, recent comparable sales can be hard to come by, making it challenging to assess a property’s market value.

“With so many different variables, rural properties are never cookie-cutter in terms of appraising value,” says Taflinger, who works with many such properties, including horse farms with outbuildings, pole barns, mobile homes, and even indoor riding arenas.

In one recent example, he looked at seven or eight farms ranging in value from $225,000 to $699,000. “In that case, it would be good to have a pre-appraisal done,” he adds.

Extra land or acreage

Surplus or excess land is another issue that may make it more difficult for a homeowner to gauge a property’s value accurately.

“When analyzing extra land or acreage, an appraiser must consider the size, zoning, and potential uses for that land to develop a credible opinion of its value,” says John Brenan, the former chief appraiser of Clear Capital, a national real estate valuation and analytics firm headquartered in Reno, Nevada.

“For example, if a property has additional land but that land is located in a flood zone where it’s not possible to build any improvements, that would be substantially different than extra land that could possibly be sold separately from the primary property,” Brenan says.

The most important valuation factor for extra acreage is whether the land can be built on or subdivided, adds Omer Reiner, a property investor and president of Florida Cash Home Buyers, who has been buying and selling properties since 2011. “If that is the case, the seller may want to request several opinions of value for the property as-is and once it’s subdivided,” he explains.