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We Need to Sell Your House Twice

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). 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 that 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 doing the appraisal for the bank. With escalating prices, the second sale might be even more difficult than the first. And now, there may be a second issue further complicating the appraisal issue. The Mortgage News Daily (MND) recently published an article titled Conservative Appraisals Increasingly Mentioned in 2015; Did Something Change? The article revealed that there was a “flurry” of comments on their website from members expressing concern about…
“…a sudden increase in appraisals reflecting market values well below what had been expected. In some cases the low appraisals had merely required the restructuring of the loan, in others they killed the deal.”
The National Association of Realtors revealed this month that 8% of the contracts that fell through over the last three months were terminated because of appraisal ... more

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