Well, your house is under contract. Took all of a day and you accepted an offer $25,000 above your asking price. Pretty sweet, right? Also negotiated short due diligence times and did not have to give up anything. This surely must be heaven. What could go wrong?
If the buyer is getting a loan to purchase your home, or even some cash deals require this, its an appraisal. This is when an appraiser comes out, looks over your home, and calculates what he believes to be a fair price for the home. If this value is below the sales price, the buyer will have to come out of pocket with cash they might not have to make up the difference between the sales price and the lower appraisal value. Or, more often, they will ask the seller to lower their purchase price to the appraisal value.
I have been seeing recently that appraisers are not allowing these super inflated sales price to go through. The lenders are apparently asking the appraisers to not add in value based on the hot market as they were doing earlier. More and more deals are coming up short due to low appraisal values.
So, before you list your home at a price way above what the going values are, remember, you might still get multiple offers at crazy high prices, but the appraisers will shoot down values that cannot be supported by comps.
To learn more about pricing your home for sale, give us a call.