Dear Monty: I just bought my first home. I discovered at the closing that it was appraised for a much higher price than I paid. It is so much more that I'd like to know if I should resell it now.

Monty's Answer: There is no exact price for a home. If you asked 10 appraisers for their opinion, there would be variation between the low and high opinions. The variation could be 30% or higher if the house is in a rural area and/or there are few comparable sales. Many home sellers see real estate agents as a commodity. This perception suggests that all agents will evaluate a home equally or very close. Based on my experience, many real estate agents need more skill or judgment to properly value a home.

Further, many experienced appraisers can be way off from the ultimate selling price. Your appraiser may be mistaken. Every home seller would be wise to take the time to gather more than one opinion of value and invest an hour in learning to interpret and understand why an appraiser came to their conclusion. Even if a close relative or your best friend is a real estate agent, every seller is at great risk when they don't seek other opinions.

FACTORS TO CONSIDER WHEN DECIDING TO SELL

No. 1: The main intent of the purchase was to find the best house in the best place to live.

Pro: You may find a better house in the same or even a better place to live.

Con: You may not find a better house in a similar or better place to live.

No. 2: Tax rules affect a gain on the sale.

Pro: If you hold the house for a certain period, you may qualify to defer your gain.

Con: If you sell too soon, you will likely pay ordinary income taxes that may affect other income.

No. 3: How will you use the net proceeds?

Pro: You can repeat the potential big gain on the next purchase.

Con: You could lose all or part of the current potential gain in your next purchase.

No. 4: The time necessary to repeat the process.

Pro: It may take less time.

Con: It may take more time.

WHY DO APPRAISERS AND REAL ESTATE AGENTS MAKE MISTAKES?

In addition to the conditions mentioned above, there is another reason evaluating property is difficult. This reason is beyond the property owner, an agent, an appraiser, and the lender's control. The homebuyer is that reason. Many homebuyers have different weaknesses when they buy a home. The major issues are:

No. 1: Emotions control their decisions.

No. 2: They're either too busy or focused on less important issues. They are sometimes inexperienced or misinformed about how to act during a real estate negotiation. For most of us, these events happen only a few times in our lives.

No. 3: They are impatient. They have spent hours dealing with the process over the past few months and want to finish it, or they inherited impatience in their DNA.

No. 4: Other considerations are more important than price. Grandma or Grandpa live a block away, and a buyer will pay extra for the convenience. Or for senior buyers, grandchildren who live close by can influence their offer.

Richard Montgomery is the Founder of PropBox, the first advertising platform in history to bring home sellers and buyers directly together to negotiate online. He offers readers solution choices for their real estate problems. Follow him on Twitter at @dearmonty or DearMonty.com.

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