How to determine “fair market value” is a common concern for our customers. In fact, it is the most important decision you will make as a FSBO seller. Do not take this decision lightly. Fortunately, you have several options to help you with that decision. Listed below are the options that you have to determine your asking price. You can ask any price you want; however, financial institutions make loans based on the sales price or appraised value - whichever is lowest.

1. Do your own homework.
COST TO SELLER: Free

This approach involves some work on your part. Simply research the neighborhood or area you live in to find out what homes have actually sold and for how much. CAUTION: Do not use “listed price” as a comparison, only use actual SOLD prices. Ask your neighbors what homes have sold, and for how much (they may know more than you think). Compare the prices of sold homes in your area to your home, and make “adjustments” for any differences such as number of bedrooms, baths or garages, no basement, etc.

2. Real estate agent Comparative Market Analysis (CMA).
COST TO SELLER: Free

This approach to pricing is also a sales gimmick used by agents to talk you into listing your property with them. However, because it is free, you might as well take advantage of it as long as you can put up with the “hard sell” and pressure that you’ll get from agents wanting you to list your property with them, for a commission. Basically what these agents will do is run your address through a computer to determine what homes have sold through the Multiple Listing Service (MLS) in your area. They’ll then compare the “solds” to your property and come up with a suggested price range. For example, they may say your home’s current market value is between the ranges of $200,000 and $210,000. Depending on the motivation of the agents, you’ll probably get a wide variety of ranges ... some will provide you with low ranges thinking they could sell your home at this low price and they could make a fast commission. Other agents will tell you very high ranges in hopes of making you believe that you can make substantially more profit selling through them than you could on your own - unfortunately, this never works!

WARNING: MOST AGENTS HAVE AN AGENDA TO GET YOUR LISTING AND IT IS VERY HARD FOR THEM TO BE OBJECTIVE, TOO!

COST TO SELLER: $250-$300

Of all the pricing approaches available to you, we recommend this one. It is conducted by a certified appraiser who has invested years in his/hers reputation to accurately provide fair market values. A certified appraisal can assure you are maximizing price while not overpricing.

How Can an Appraiser Help Me Sell My Home?*

Don’t assume. Don’t guess. Know what your house is worth!

When you know your home’s value you can market your biggest asset effectively.

Appraisers know the market and how to determine the value of your biggest asset.
We look at the property without preconceived ideas, evaluating its location, neighborhood, curb appeal, design, interior and exterior amenities, features, condition and updating.
Appraisers personally inspect & measure the house and verify comparable information. Most agents don’t measure; most assessors don’t know the condition.
Final value opinions are based on comparable properties in the subject’s market area, taking into account similarities and differences.
Appraisers are licensed by the State, with a minimum of 120 hours of classroom learning and 2000 hours of hands-on apprenticeship before they can appraise on their own. With mandatory continuing education throughout their career.
By law, appraisers must be unbiased. Appraisers have no interest, financially or otherwise in the value of the property. Their only interest is in a fair, accurate assessment of the property.
Real Estate Appraisers are consulted and depended upon by courts, attorneys, lenders and private individuals to determine accurate values for litigation, divorce, tax appeal, investment and finance.

HOW TO CHOOSE A GOOD APPRAISER*

Experience is Everything!

In Michigan, there are 4 levels of licensure.

Ask who will be doing the inspection, completing the report, and what license they each hold.

Limited Appraisers have taken the minimum 75 hours of classes with limited experience. They must have a co-signer for all appraisals.
State Licensed Appraisers have the minimum 90 hours of classes, 2000 hours experience.
Certified Residential Appraisers must have 120 hours of classes, a minimum of 2500 hours experience, plus pass 2 state exams. Currently, there are fewer than 100 Certified Residential Appraisers in the state. This higher designation indicates additional training & experience and allows for the appraisal of any residential property, regardless of value.
Certified General Appraisers may appraise any type of property, but typically only appraise commercial or industrial property.

Location! Location! Location! Just like in Real Estate, in appraising location is everything! Make sure the appraiser you hire is familiar with your area.

Ask what areas they cover. Remember the phrase, “Jack of all trades, master of none”. If they cover 9 counties, chances are good that they don’t know any one of them well.
Ask how many appraisals they have done in your city / township in the past year.

Purpose. Does the purpose of the appraisal change the value of the property? NO! Any number of appraisals of a particular property should yield the same results. However, some appraisers get caught up in giving lenders/clients the answer they are looking for, and lose track of how to actually determine value.

Ask the appraiser what the bulk of their business is. Is it for refinance? Purchase? Private / Legal?
Have they done appraisals for individuals looking to know the market value of their home?
Have they done any work for relocation, divorce, estate settlement, etc.? These types of appraisals regularly stand up to extensive scrutiny, indicating that the appraiser is experienced and accurate in their process and results.

Professionalism. The property the appraiser is valuing is your greatest investment and asset. Regardless of the purpose for your appraisal, you deserve to be treated like a client. This should include promptness, courtesy, accuracy and timeliness.

Ask the appraiser how long they anticipate it will take to determine your value and to get the written results to you.

This is your home...

Your investment.

The choice is Yours!

*The Above information was provided by

Kim Miller, President of Landmark Appraising

For Sale By Owner sellers usually price their homes too high to start with. They reason, “I’ll price it high and I can always lower the price later if necessary.” This is a drastic mistake!

ALWAYS TRY TO PRICE YOUR PROPERTY COMPETITIVELY RIGHT FROM THE BEGINNING. If you overprice initially, you will probably be offered thousands of dollars less when it is finally sold, than you would have been offered early on if the price had been competitive. The reasons for this are simple:

FACT: Buyers are “market smart.” They know the market. They know how many homes there are in their price bracket. They have already shopped around and know if your home is priced fairly and competitively compared to others.

For more Information on Successfully selling By Owner,
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