Good morning. My name is Tom Heath with the Heath Team at Nova Home Loans. Today is July 13th and this is our weekly update of topics impacting the real estate world.
Today, we’re going to discuss briefly about appraisals as we are seeing an increase, not a large amount, but an increase in appraisals that are coming in below the agreed-upon sales price. We know it’s a hot Market. We know that homes have multiple offers and concessions are requested that can all move a sales price above what may have been the actual listing price on the home and we’re running into issues on the loan side is if the appraisers opinion doesn’t match the agreed-upon sales price we have to adjust the loan or the sales price or some aspect of the transaction to make it work.
What we’re seeing here is the discrepancy because of the way things are viewed. Appraisers are historical, they have to look at things that have closed that are comparable to the subject property. In the real estate world, wetend to look at trends and where things are going. So it’s very very common for a listing agent to have one impression of a property and an appraiser to have a different impression because they’re looking at the facts a little bit differently. Doesn’t mean either one is right or wrong, does mean that we have to bridge that gap.
If you have an appraisal that has come in below sales price, there is process to for a reconsideration of value. Has to be prompted by the buyer and usually for success in those situations, we’re looking for comparable sales the appraiser should have used. Not necessarily difference of opinion on the the condition of the home or the amenities, really it’s coming down to either a flawed report or comps that should have been used. Now it is possible that at the time of the appraisal there were listings that would have supported the value that had not yet closed. And sometimes they do close very quickly after an appraisal is done. Therefore, it could be a comp. So if you have a situation like that, reach out to your lender if your buyers interested in reconsidering that value.
If have any questions on appraisals or process, please don’t hesitate to give us a call. Tom Heath and The Heath Team at Nova Home Loans. Our website is a fantastic resource for you for information in the Mortgage Market. Hope you have a great week!