Appraisals Still Haunting Real Estate Deals

On October 20, 2011, in Listings, by David Monsour

Personally I’ve managed to dodge appraisal issues this year so I feel fortunate but last year was a different story.  I had a few deals blow up because the value just wasn’t there.  Two days ago a newish agent in my office was sharing his most recent experience, one with which I can relate.  He had a home under contract for all but 50,000 above the appraised value.  He was the listing agent and being a bit new sometimes you believe that something is worth more than it really is.   In this case he was 100% right, but the problem is there was no proof of value.  In Gettysburg right now the number of comparable sold properties is usually pretty slim.  We are always reaching for sold properties to use as comparable sales to price listings.  It’s a real challenge.

The real bummer is when you come to an agreement with another agent on a sales price that all parties agree is fair only to have an appraiser come in an squash the whole deal.  One might ask the question, “how does the market recover if the buyer is willing to pay x but the bank says its worth x -50.”  You see my point.  I’m also not blaming appraiser directly because at the back end of this is a bank trying to guarantee the value of an asset that is, in some parts of the country, still losing value.  It’s a challenging situation but it makes you wonder how values will ever recover unless people are over paying for homes with Cash and we all know people with Cash rarely over-pay for anything.  Seemingly if they managed to save up that much cash they tend to know what to do with their money.

So in conclusion appraisal problems are still there.  A lot of times it’s on the agent.  I had my one mulligan last year and figured out that you can’t bend the rules, you can’t stretch the price because in the end you will lose.

 

Looking to list your home in Gettysburg, Hanover, New Oxford, Fairfield, Biglerville, or any other town in the area contact me I’m happy to help.

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