How Many Times...??

By
Real Estate Agent with Keller Williams Realty - Topsfield, MA 92593-B

Have you ever run into a situation where you have an accepted offer and Purchase and Sale Agreement at a great price, maybe even over asking, Then the bank appraiser shows up, you show your comps, they do their report AND you learn the appraisal came in less than the agreed upon & accepted price?

It Does Happen AND it's not always the appraiser's fault. Here are some reasons offered by KCM

Homeowners: Your Home Must Be Sold TWICE

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge: 

“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage.

A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your Home Must Be Sold TWICE | Keeping Current Matters

Bottom Line

Every house on the market must be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, meet with an experienced professional who can guide you through this and any other obstacle that may arise.

Posted by

I pray that God our Father and the Lord Jesus Christ will be kind to you and bless you with peace

2 Thessalonians 1:2

 

Doug Dawes REALTOR®, AWREP, LMC

Broker Sales Associate

KELLER WILLIAMS REALTY - Topsfield/Newburyport

49 Main Street
Topsfield, MA 01983
 978-887-3995  ~ Office
 978-270-3037  ~ Cell
 DougDawes@KW.com

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Industry
Location:
Massachusetts
Groups:
FOR SALE BY OWNER - MARKETING(FSBO)
Boston Real Estate
New Hampshire - Real Estate and Life in The Granite State!
MA REALTORS
Boston Area Real Estate
Tags:
home values
appraisal
appraisers
banks
supply and demand
demand
supply

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
4,104,787
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Doug, this does happen, and often the home does have to be sold more than once.  UGH!  

Jul 19, 2017 06:27 AM #1
Ambassador
1,613,740
Harry F. D'Elia
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I have to agree that the home must appraise for the sales amount or no deal.

Jul 19, 2017 06:28 AM #2
Rainmaker
776,375
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Good Morning Joan Cox 

Most every sale requiring a mortgage has to be sold twice

Jul 19, 2017 06:28 AM #3
Rainmaker
3,021,035
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

It is happening here, although rare, more than ever before. What gets me is when there are clear comps, in the same neighborhood, same condition, size and the subject has more upgrades but they appraise it lower than neighborhood sales when values are increasing. 

Jul 19, 2017 06:29 AM #4
Rainmaker
776,375
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Hi Harry F. D'Elia 

Banks can be tough and in a very competitive market with prices surging this scenario happens more often

Jul 19, 2017 06:30 AM #5
Rainmaker
776,375
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Good Morning Scott Godzyk 

Ditto...that is maddening when it happens

Jul 19, 2017 06:30 AM #6
Rainmaker
3,202,959
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Doug Dawes,  I wonder if a home that was just done  yesterday will make it or not, you never know.

Jul 19, 2017 06:33 AM #7
Rainmaker
776,375
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I know what you mean Will Hamm it is really just an opinion of value and we know about opinions.

Jul 19, 2017 06:38 AM #8
Rainmaker
3,634,806
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Doug. I think this happens a lot because agents don't provide the appraiser with annotated comps, pictures, upgrades and pendings. 

Jul 19, 2017 08:34 AM #9
Rainmaker
776,375
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Hi Sheila Anderson 

And many times the appraisers do not even consider them

Jul 22, 2017 07:25 AM #10
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
776,375

Doug Dawes

Your Personal Realtor®
Are You Looking?
*
*
*
*
Spam prevention

Additional Information