Monday, August 15, 2011

Are Appraisals Holding Us Back?

Here's an interesting WSJ article that talks about how appraisals are affecting the sales of homes across the country because the appraisals will come back at a lower price point than the agreed upon purchase price between a buyer and a seller.

http://online.wsj.com/article_email/SB10001424053111904006104576500170808091148-lMyQjAxMTAxMDEwMzExNDMyWj.html?mod=wsj_share_email

Unfortunately, the appraisers have to stick to strict guidelines given to them by the banks for whom they are doing the appraisal for. They may not have many comparable sales to choose from to support the purchase price and have to make do. Some of these comparable sales may have been foreclosures or short sales; this has really been a big issue nationwide. A foreclosure price may be much less than market value and it brings down the neighborhood's values.

The bottom line is that we all have to deal with appraisals if a buyer is getting a loan from a bank so the best thing to do is have the listing agent meet the appraiser at the property, provide comparable sales and tell the appraiser everything that is positive about the home and property to make sure the home appraises at the purchase price or higher.