When it comes to homes for sale in Northern Virginia and elsewhere, it's usually not just the buyer and seller who need to agree on the sales price. If a bank is involved with the buyer's mortgage, then the bank needs to agree that the home is actually worth the sales price, or it could limit the buyer's ability to obtain a mortgage. Banks use appraisers to determine the home's value, and their appraisals have sometimes become more of sticking point in current home sales than in recent years.
One key reason for current appraisal challenges in our local area is that Centreville foreclosures and Centreville short sales have become much more common. Foreclosures and short sales often result in sales at lower prices than their "standard resale" neighbors. Earlier this decade, when home prices were quickly escalating, it was quite a rarity to see a home foreclosure or a short sale. Appraisers understood that the foreclosure/short sale was an uncommon financially distressed sale, and would often discard that home's sales price as a comparison point when determining property values in the neighborhood. However, foreclosure and short sales are now quite common and too numerous to ignore their impact on resale prices in a neighborhood. They have slowly but surely become valid points of comparison for appraisers because they are in fact lowering resale values in many neighborhoods. So it's not necessarily true that a home seller can ignore a nearby foreclosure sale when setting their own home sales price, because the appraiser may very well take that foreclosure sale into consideration when determining the seller's home value.
The important takeaway in all this is that while negotiating the price of a home, buyers and sellers must also be aware that an appraiser may need to agree on that price. A Realtor can help provide a professional opinion on housing prices, and can discuss the pricing factors that may come into play in the eyes of an appraiser.
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