Are you wondering how much you can sell your home for? Continue reading Heather Chilvers’ article for more guidance on this subject.

Heather is amongst Coldwell Banker Bermuda Realty’s. leading Sales Agents. She has been working in real estate for over 30 years. If you have a question for Heather, please contact her at or 332 1793. All questions will be treated confidentially. You can also follow her on Facebook and Instagram.

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How much you sell your home for, depends on the appraisal process: 

In the wake of COVID-19, it’s no secret that the value of homes has fallen. As a homeowner, this current market probably doesn’t look too favorable to you. However, as a buyer, whether you are thinking of downsizing or upsizing the value of the home you are looking at, will have also decreased in value. Therefore, you will need less money today to buy the same house than you would have when the market was stronger. So it is all relative. Likewise, the person buying your property will also need to borrow less, and that can open you up to a whole new field of buyers, who weren’t in this position beforehand.

Determining Factors

The fact is, the amount of money you want or need for your property does not correlate with what the market dictates its’ worth. For instance, I might want or need to sell my home for $1 million. However, that doesn’t mean my house is worth that much money. A home’s value is determined by two factors a) the amount someone is prepared to pay for it, and b) perhaps more importantly what it is appraised for.

The appraisal is an all-important step in the home selling process. Any buyer who is applying for financing will need to go to the bank. The bank will only finance about 80 percent of the home’s value as determined by an appraisal or the offer and acceptance price, whichever is the lower. A real estate appraisal is simply that — the expert opinion of a certified, licensed professional who determines the value of a piece of property.

If you list your home at $1,000,000 but the appraisal only comes back at $935k, then unfortunately in the eyes of the lender your home is overpriced. Once the appraisal is received, it may be scrutinized by an in-house banking team. Sometimes the value the bank assesses it at, is not even as much as the appraised value.

The No-nonsense Factor

The home appraisal is a no-nonsense factor in a decision that is often emotional for both the seller and the buyer. A motivated seller should either get a professional home appraisal done within one month before putting the house on the market, or if they have listed it as a Sole Listing with one Agency, ask that Agent to provide them with a Comparative Market Analysis, of homes that have just sold, and homes that are currently on the market that will be competing with theirs.

Coming on the market at the right price will help ensure a quicker sale and a smoother transaction. This is particularly important if the seller has already picked out their new home. Be transparent with the Agent that you have commissioned to sell your house. Be totally upfront about money, motivation, and time frame. Your Agent is there to help you, and they want to do the best job for you that they can (or are able to).

For the buyer, a home appraisal protects the buyer from paying too much for a house simply because it was love at first sight.  It also protects the Bank from lending against a property that’s worth less than they’ve invested.

Primary Appraisal Methods

There are two primary appraisal methods for residential property. In the sales comparison approach, the appraiser compares the property with several similar homes that have sold in the area, often called comparables, or comps. The analysis considers specific components, such as lot size, square footage of finished and unfinished space, style and condition of the house, as well as other amenities such as garages, pools, and location.

The cost approach is rarely used, but can be more for a newly built property, and based on rebuild costs. The appraiser estimates the cost to replace the structure on the property if it were destroyed. The appraiser then looks at land value and depreciation to determine the property’s worth. Now you learn that your home is valued at $935,000 — a full $65,000 lower than your asking price! The lender won’t loan more than 80% of the appraised value, (plus the buyer has to come up with the closing costs) and even if they are in a strong position, the buyer will question why they should pay over the appraised price. So what do you do?


From the lender’s standpoint, the mortgage transaction is at a standstill. So it is at this point it is usual to go back to the negotiating table. After all, the appraised price is exactly that, and there are not many people who are willing to pay over that number, except perhaps in a multiple bid situation. Perhaps you, the seller, should lower to the appraised price. Rarely will the homebuyer be willing to increase their cash down payment (even if they are in a position to) in this market.

The buyer and seller can negotiate compromises that will satisfy the lender. If, however, negotiations fall through and the appraisal is still too far below the figure that the bank is willing to finance, then there’s no choice but to cancel the transaction. The buyer probably signed a sale and purchase contract, stating their offer for the property is subject to a loan contingency. This is a statement that allows the buyer to cancel the contract and receive any deposit paid to the seller as they are unable to qualify to buy the property at the agreed terms. A home appraisal is more than just another cost added to the bottom line. It’s a protection for everyone involved in the home-buying process. It will help sellers be realistic about how much their home will sell for, and buyers make a more informed decision about purchasing a home. If as a seller, you feel the appraised value is lower than you can accept, then it may be worth waiting to re-list your property, when the market conditions are more favorable to you.

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