The real estate market has definitely been heating up in Northern Virginia and D.C. recently. Open houses are swarming with potential buyers, homes are selling quickly. At almost every home I showed to buyers this past weekend, there were other agents and their clients walking through the home as well.
When the market heats up, one issue that really comes into play is the effect of appraisals on sales. When purchasing a home using mortgage finance, the mortgage lender requires an appraisal and will only lend based on the appraised value of the home. If the home appraises at or above the agreed-upon sales price, there's no problem whatsoever. However, what happens when the appraisal comes back below the sales price?
I recently created this short informative video below to explain the options in this situation.