Appraisals....Becoming More of an Issue in a Buyer's Market

Recently, in the past 12 months or so the Raleigh area has had many sellers scratching their heads when they are not getting asking price and they are parting with their refrigerator, TV and other personal items written into the contract by the buyers.  It is called a buyer's market and an issue associated with this, which is rarely touched on until it hits home...no pun intended, is appraisals.

Appraisal=Home must appraise AT or HIGHER value of sales price on contract.

When sellers insist on listing at a certain price some agents may or may not take the listing, but the one thing that should be pointed out in the listing presentation is.......you can list for whatever you like whether we list it or another Firm does, but it has to appraise.  Meaning if a seller swears their house smells, looks, feels better and is just a nicer house than the others in the neighborhood and they should get more and are "holding out" for a higher offer, the banks are going to laugh at you.  So even if a buyer is willing to pay your price.....the bank has final say.  IT IS WHAT IT IS.  BUYERS determine the value of the home by a series of purchases close in proximity to your home, appraisers report on what buyers are willing to pay.  There is A LOT that goes into an appraisal and they definitely earn their money and are badly needed, but the fact remains that the buyers ultimately determine the value. 

So if you are a homeowner considering to sell, be realistic and make sure you don't get too caught up in the pricing game.  Listen to your agent.  They are not going to take responsibility OR blame for the market....it's just their job to help you understand it.  For more information visit us here.