If you're looking at properties on a fairly regular basis, I'll guarantee you've heard the following line in the past 6 months:
"We have an appraisal from [insert date here] for $[insert amount here]."
Stop. Write it down. What was the date they told you? If it's anything other than the last 3 months, it's obsolete.
According to Shobhana Chandra of Bloomberg.com,
"Sales of previously owned homes in the U.S. fell in April and the supply of unsold properties reached a record, signaling no let-up in the 27-month housing slump.
Purchases declined 1 percent to an annual rate of 4.89 million, higher than forecast, the National Association of Realtors said today in Washington. The median price fell 8 percent from April last year, the second-biggest drop."
The average American home lost somewhere around 4% in the last 6 months. At the median home price of $202,300, your seller just lost more than $8,000 in equity. In the last year, they lost more than $16,000. Their appraisal is invalid and a new appraisal will be needed.
For all of you investors out there looking for great deals, don't listen to the hype. Do your homework.
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