
Introduction
To sell your home for more than its appraised value, you’ll need to receive multiple offers. Creating a "bidding war" pushes the price above asking and, potentially, above appraised value. There are three key components to achieving the highest price: Presentation, Marketing, and Pricing. In this post, we’ll take a closer look at pricing your home to get above appraised value - it may not be what you expect.
Home Presentation
To sell above appraised value, your home must stand out—it needs to be the nicest, most updated, and likely the largest in your neighborhood. Otherwise, it will compare too closely to other homes, limiting its potential to achieve a substantially higher price than recent neighborhood sales.
Renovations, particularly in the kitchen and bathrooms, should already be completed. However, since you won’t recoup 100% of renovation costs, it’s usually not recommended to take on major projects solely for selling.
There are many ways to make your house shine during preparation for sale, and we’ll explore these in more detail in a future post.

Marketing
Once your home looks like a model, it’s time to ensure it gets noticed by potential buyers. **Professional photography is non-negotiable** Depending on your home’s features, you may also benefit from additional visuals like drone photos, video tours, floorplans, or a 3D virtual tour (e.g., Matterport). A picture truly is worth a thousand words, and strong visuals are key to capturing buyer attention.
The marketing plan should focus on generating the most interest in the shortest time. This creates a sense of demand, scarcity, and the all-important fear of missing out. There’s much more to say about marketing strategies, but that’s a topic for another article.
Why Does an Appraisal Matter?

The words “The house didn’t appraise” can throw a wrench into a sale. This means the bank won’t lend the buyer enough money to cover the agreed-upon price, often leading to a request for a price reduction or even cancellation of the contract.
There are two types of buyers: Mortgage Buyers and Cash Buyers.
• Mortgage buyers will need to obtain a mortgage pre-approval before making an offer and their mortgage will be contingent on an appraisal. In other words, the bank will not provide a loan to the buyer unless they confirm that the house is appraising for the agreed price. The bank won’t lend $500,000 for a house worth only $400,000, making the appraisal a critical step.
• Cash buyers, on the other hand, aren’t bound by appraisals because they’re not relying on a loan. They can pay any price they choose.
Pricing a Home to Get MORE than Appraised Value

Buyers typically won’t pay more than appraised value—unless they’re competing with others. Pricing your home strategically is the best way to attract multiple offers.
• Price at Fair Market Value.
Your Realtor should provide a Comparative Market Analysis (CMA), using recent comparable sales to determine your home’s fair market value. Factors include square footage, bedrooms, bathrooms, age, condition, renovations, and amenities. The result is an apples-to-apples price comparison, usually within a range of ±5%.
• Avoid pricing too high.
Overpricing often leads to fewer showings and offers, which can force a price reduction. Once the price drops, your first offer is typically lower than the new reduced price—a common trap for sellers.
• Price at the middle or low end of fair market value.
This strategy creates demand by making buyers feel they’re getting a great deal. More showings lead to multiple offers, which drive up the price. Buyers become emotionally invested, imagining their lives in the home, and are willing to outbid others to secure it.
Appraisal Gap Coverage

Appraisal Gap Coverage is a powerful tool for selling above appraised value, especially for buyers using a mortgage. This means the buyer agrees to cover the difference between the appraised value and the negotiated sales price in cash.
Example:
• Negotiated Sales Price: $450,000
• Appraised Value: $425,000
Without appraisal gap coverage, the low appraisal would trigger renegotiation. The seller might lower the price to $425,000, losing $25,000, or risk the buyer walking away.
With appraisal gap coverage, the buyer guarantees to pay the agreed price regardless of the appraisal. Most buyers set a limit (e.g., $25,000 above appraisal), providing a safety net for both buyer and seller.
Conclusion
Getting appraisal gap coverage is the most reliable way to sell above appraised value. The key is to secure it early, while buyers are most excited about the home. Without it, buyers often hold firm at appraised value, whether out of principle or lack of cash to cover the difference.
By pricing strategically, generating multiple offers, and securing appraisal gap coverage, you can confidently sell your home for the highest possible price.
Comentarios