When someone is getting ready to sell their home, they often start to think about how much it's actually worth. They think about all of their home's amazing qualities and come up with a big number that often exceeds the actual appraisal.
There are a few things that happen when homeowners consider the value of their home. We have to consider that a person's property holds significant non-montary value, and getting a realistic snapshot can be tricky. The biggest factor in misjudging the value of someone's home is what we like to call the "upgrade factor".
The upgrade factor means that a person thinks about all of the changes they've made to their house and all of the work they've spent making their home better. Whether it's a brand new kitchen remodel or crown molding, homeowners know exactly what they've "upgraded" in the house and automatically calculate that into their estimation. Unfortunately, they don't realize that other comparable homes already have similar qualities (or even better qualities) and they overestimate the value-added.
In addition to the upgrade factor, homeowners often base their estimation on the price they paid for the home. The problem is, however, that the market constantly changes. The home might be worth more than what they initially paid, or, in some cases, the home may be worth less than what they initially paid.
All of these things account for the gap in homeowners' estimations and appraisers' estimations. Alas, having a top-notch realtor can save homewowners time, energy, and money by listing their home at a competitive price.