Appraisals are killing real estate deals. This should come of surprise to no one. As a matter of fact, the appraisal has come up short on my last four transactions. It's quite common for appraisals to come in at $25000 below contact prices, or even more. Just this week I had a property appraise at $140,000 below the contract price! Needless to say, all parties are in shell shock. Yes, the listing agent, the seller, the buyer, and myself expected that we would come up short, and would have to then re negotiate. However, this is more then 100% off from any of our wildest estimates. For now, we're in limbo. The buyer still wants it, the seller still wants to sell it, yet the buyer can only buy for the amount that their lender will lend. What to do? "Blast those appraisals!" you say ? I think our industry is barking up the wrong tree. The appraisals are merely a reflection of what properties are currently selling for, and the buyers by and large will pay the appraisal value. Unfortunately, we're just not adequately educating our home sellers. It's a bitter pill to swallow for a home owner, but a reality nonetheless. Lets start off on the right foot by having the home owner order an appraisal before bringing the property to market...
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