Lower Appraisals Hurting Sellers
January 20, 2010 by admin · Leave a Comment
With the influx of foreclosed and distressed properties crowding the market, it’s no wonder that sellers are up in arms about their home’s appraisal coming in thousands of dollars short of the listed price of the home. In their eyes, and the eyes of many Realtors, it is simply not fair to compare a standard home that’s not a short sale or foreclosure to those that are.
Both the National Association of Realtors (NAR) and the National Associtation of Home Builders (NAHB) report substantial numbers of sales being thwarted by lower than expected appraisals.
Overall, you must remember that an appraisal is basically one person’s interpretation or opinion on what your home is worth. The appraisals are (sometimes arguably) done by experienced professionals who base their opinions upon the current local market for similar homes. When that pool of properties (referred to as comps or comparables) includes mostly foreclosed or distressed homes, it can be tricky to assess a home’s true value. Sure, your home may be worth $400,000 based on what you paid and the upgrades you did, but when the same house with the same upgrades sells for $329,000 down the street as a foreclosure, buyers are less likely to shell out the extra money for yours.
Back to Market Basics
It’s all a long, drawn out way of saying. “it’s elementary, my dear Watson.” When two retailers have the same item you want, you buy the item at whichever retailer is selling it cheaper. Appraisers are simply doing their best in a market they’ve never seen before.
If you are looking to sell and you have questions or concerns about what the true market value of your home is in the current market, contact me today!
~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 – office
301-653-8116 – cell
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