lake county real estate. and then some…

selling homes…a family tradition

How much of a problem can an appraisal cause?

Leave a comment

When you list your home for sale, you are not only selling the home to one “person”.  You are actually selling your home to THREE different people for the same transaction – another Realtor, the buyer, and the appraiser.  Unfortunately, if the appraiser does not share the same opinion of the property’s value, the deal can die.  The appraised value is paramount to the buyer securing a mortgage.  It validates the market price of a home, which is significant to the investor providing the mortgage funds.  How much of a problem can “appraising out” be?  According to Quicken Loans, it will most likely be an issue in 2016.

Will Appraisals Continue to be a Challenge in 2016? | Keeping Current Matters

First American Title issues a quarterly report, the Real Estate Sentiment Index (RESI), which “measures title agent sentiment on a variety of key market metrics and industry issues”. Their 2015 4th Quarter Edition revealed some interesting information regarding possible challenges with appraisal values as we head into 2016.

“The fourth quarter RESI found that title agents continue to believe that property valuation issues will be the most likely cause of title order cancellation over the coming year.”

This shouldn’t come as a surprise. In a housing market where supply is very low and demand is very high, home values increase rapidly. One major challenge in such a market is the bank appraisal. If prices are jumping, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.

Another monthly report by Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation. Here is a chart showing that difference for each month through 2015.

Will Appraisals Continue to be a Challenge in 2016? | Keeping Current Matters

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. That is why we suggest that you use an experienced real estate professional to help set your listing price.

Advertisements

Author: kieronquane

i am a mom. and a wife. and a realtor. when i grow up i want to spend all day taking pictures and then spend all night looking at them. in the meantime, my mom and i are going to keep selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s