Sometimes sellers worry. The same as real estate buyers do. Both have quite a large amount of skin in the game. The sellers want to get top dollar for their homes and the buyers in the real estate world don’t want to pay too much for said home.
The balance is interesting to watch. When most people may buy and sell three homes in a lifetime, a top Producing real estate team will sell that many in a week.
When it comes to the appraisal of a home, condo or townhome, from a sellers or buyers perspective, there are a few things that both should realize.
The days of the “appraisal cowboys” are over. There are no “red sash” donning appraisers that stand alone and have their reports regarded as the word of god any longer.
Today, the appraisers are being watched more and more by their employers. The banks worry about lending too much money on any home, that those buyers, they are financing are buying.
Therefore, they have implemented various “checks and balances” into the mix. Trained underwriters and lenders that know what to look for in the appraisal reports and more.
Before I get too deep into this article – I would like to clarify something. The appraisers are not to blame for the prices of real estate going so high as to have the market collapse, back in the day. If you want to point fingers – you may as well point that finger at all parties, vendors, government, etc, involved in some part of the home buying process at that time.
When it comes to the banks that are lending money on real estate, they are strictly watching their bottom line, so buyers don’t have to worry about paying too much.
If anyone should worry, it should be the seller on an overpriced home. That is why it’s so important to hire only Professional Realtors that understand how to price and sell real estate in the specific city of interest.
If the appraisal on the home you are selling comes back lower than the amount you had offered by the buyer, then as a seller you some decisions to make.
Seller thoughts on a lower appraisal
1 – As a real estate seller, are you willing to reduce the price to match the appraisal?
2 – Is the buyer willing to pony up the extra money to meet the appraised amount? (some loan types prohibit this act…)
3 – Is the market such that a buyer with a different lending type will step to the plate and their appraiser may have a differing option? (sometimes, appraisers have differing opinions of value, albeit, they should be pretty close…)
4 – Maybe meeting 1/2 way is an option – are you willing to do this?
Buyer thoughts on appraisal
1 – Are you willing to come up with the extra money to meet your original offering price? (what is your competition like, is inventory lacking, are prices increasing?)
2 – Maybe meeting the seller 1/2 way is an option?
3 – Asking the seller to reduce their price to the appraised amount is also an option.
4 – If you are in a buyers market, you hold most of the cards if there are homes in competition with this one.
Ask your realtor to cover all of these bases with you before putting pen to paper. There is a lot of good advice to be gleaned from a Professional that represents buyers and sellers of real estate.
Don’t forget to tune into our Daily Santa Clarita real estate radio show and program.