Appraisals, appraisals, appraisals
It’s no secret that SunCrest home values have increased dramatically over the past two years. Gone are the days of homeowners drowning with an “underwater” mortgage (yay!) and many SunCrest homeowners who purchased at the bottom of the market are sitting on substantial amounts of equity. However, in a hot SunCrest real estate market, buyers and sellers are being faced with a challenge: The Appraisal.
Unless it’s an all cash purchase, each home must be sold twice. First to a prospective buyer who makes an offer, and second to the appraiser who must agree that it’s worth what a buyer is offering. When a market sees rapidly rising prices, appraisal values may lag behind and that second sale can be more difficult than the first.
In a sizzlin’ SunCrest real estate market, SunCrest homes are receiving multiple offers and offers above list price. The appraiser is then tasked with supporting the buyers and sellers opinions of value. The problem? In many cases, the appraiser’s opinion of value is different than the contract price. According to a recent report by Quicken Loans, the gap between homeowners opinion of value and that of an appraiser continues to widen. This growing gap is causing some hiccups to an already emotional process.
The appraisal came in low. Now what? Our advice: be prepared. At the time an offer is submitted and reviewed, discuss the options of the “what if the appraisal comes in low?” Are the REALTOR and seller prepared to dispute the value if they feel it is wrong? Does a buyer have the ability to pay above the appraised value and/or work with their lender to restructure a loan? Having a professional on your team who is able to support, educate, and most importantly communicate the contract value may not only help a buyer or seller achieve their SunCrest real estate goals but save potentially thousands (even tens of thousands) in the event of a challenging appraisal value.
Our SunCrest Market Update is a hyper-local analysis of the most up-to-date information regarding the SunCrest real estate market. The previous month’s SunCrest housing information and future editions are released monthly.