How low appraisals affect home sales Monday, May 23, 2016
One of the most frustrating things to happen while buying or selling a house is the appraisal coming in lower than the sale price. This can kill a deal quicker than anything else. With the housing market in recovery the past few years, common sense would tell you that low appraisals shouldn't happen often, but that isn't the case. According to the National Association of Realtors and a survey they conducted, nearly 35% of home sales are either delayed, cancelled or prices lowered due to low appraisals. When asked, real estate agents gave a lot of answers to how they think appraisals ruin their sales. Lee me know if you agree:
Reason #1- Appraisers using short-sales, foreclosures and run down properties as comps and never bothering to adjust to current market conditions or the condition of the property itself.
Reason #2- Appraisers not taking into consideration low property inventory, local market conditions or multi-bidding conditions that can have a very real impact on the values.
Reason #3- One of the most bothersome factors is the inconsistency of appraised values. You can have three appraisers look at the same home, and all three might use different comps, and give very different values.
Reason #4- Appraisers not being familiar with the target location. Appraisers might have knowledge of the state or even county, but not with the particular target market, making their values not in line with other homes.
Reason #5- Time delays by both the banks and appraisers in getting things done in a timely manner.
All of these things can add frustration and stress to any deal, especially when the seller won't budge on price and the appraised value comes in much lower than asking price. Let me know what issues you have experienced in regards to appraisals and what you could or couldn't do to overcome it!