Realtor - Amanda S. Davidson: How To Handle A Low Appraisal

How To Handle A Low Appraisal

How To Handle A Low Appraisal

Low appraisals are a common occurrence in a seller’s market but, they’re a possibility in any market conditions. It can be heartbreaking for sellers and buyers when an appraisal comes in low but, it’s important for all parties to remain calm. It’s not a death sentence to the entire deal but, it will take some compromise and working together to get it resolved.

How To Handle A Low Appraisal 

What are the options when a low appraisal comes in?

Lowering the price - when an appraisal comes in low the seller can opt to lower the sale price to the appraised value. The seller doesn’t have to opt to lower the price but, it is an option.

The buyer can make up the difference in cash- the buyer can always put more money down at closing to account for the difference in the appraised value and the agreed upon sale price.

How To Handle A Low Appraisal 


Compromise –
the seller and the buyer can work to find common ground in terms of the seller lowering the price and the buyer bringing more cash to closing to account for the remaining difference. It doesn’t have to be a 50/50 split, it can be any combination as long as both parties are in agreement to the terms.

Buyer Withdraws – a buyer that has an appraisal contingency in place can withdraw from the contract if the appraisal comes in low. This is last resort as a low appraisal doesn’t mean a lender won’t provide a loan on the home. It just means that they will only provide a loan based off the appraised value and any shortage has to be accounted for in the form of increased cash at closing, a lower sale price or a combination of the two.


How To Handle A Low Appraisal

Appeal The Appraisal (added after originally posted) – appealing the appraisal can be done through the lender. If there are different comps to be provided they can be submitted to the lender to then share with the appraiser. There are no guarantees the value will be changed if an appeal is made but, it can result in a successful outcome. An appeal can be necessary if an error is discovered in the report as well. 

I don’t know anyone that likes receiving the news of a low appraisal but, it is something that happens from time to time. Weighing the different options to find a win-win for both sides is always possible. It just takes keeping a level head and working as a team to achieve a successful outcome. 

 

 

 

Amanda Davidson Real Estate Group

 

 

      

 

Amanda Davidson

Amanda Davidson Real Estate Group

Broker - Owner
Licensed in VA and DC

5680 King Centre Drive #600
Alexandria, VA 22315

Cell: 703.431.3755
Fax: 703.562.7057




Comment balloon 57 commentsAmanda S. Davidson • July 22 2018 06:26PM

Comments

Good morning 

Thank you for sharing your information for us, great information.

Have a great day.

07/25/2018. 

Posted by Anthony Acosta - ALLATLANTACONDOS.COM, Associate Broker (Harry Norman, REALTORS® ) 5 months ago

Amanda, great explanation of this process when an appraisal comes in less than contract price.  We see them every so often.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) 5 months ago

Hi Amanda S. Davidson, some believe if the appraisal comes in low, the home isn't worth the agreed sales price, however, that's not always true. You've provided great options for both buyers and sellers who are facing this challenge. 

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) 5 months ago

Do you ever dispute the low appraisal and win?  When a low appraisal is not warranted, it is sad to see sometimes that the appraiser didn't use the most comparable properties in their assessment.

Posted by Brian England, MBA, GRI, REALTOR® Real Estate in East Valley AZ (Arizona Focus Realty) 5 months ago

Good morning Amanda. You're right it happens and it is stressful. I tried to avoid this up front by always meeting the appraiser with annotated comps. If it still came in low it can be challenged and if your data is good it can sometimes help.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) 5 months ago

This can happen Amanda and many times it's the appraiser who could not find the correct comps. There have been instances where we have given the right comps, but the appraiser did not accept them from us...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) 5 months ago

It happens, Amanda... and fortunately, I've rarely seen it. But it did happen to clients of mine a couple of months ago... and we challenged the appraisal with the lender, provided data and they reappraised at the contract price. That's also an option if you have a good argument.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage | Charlotte, NC) 5 months ago

Good morning Amanda - appraisals have certainly changed things from before.  I heard a builder down in Florida say they could not put high impact windows in lower price houses because they won't appraise.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 5 months ago

We forget how negotiable Real Estate really is...Apprasials remind us

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) 5 months ago

Thanks for sharing your options, Amanda S. Davidson.  Low appraisals do happen and knowing the best options is always helpful!
Bruce

 

Posted by Bruce Kunz, REALTOR®, Brick & Howell NJ Homes for Sale (C21 Solid Gold Realty, Brick, NJ, 732-920-2100) 5 months ago

Good explanation on handling appraisals, Amanda. I've had a few low ones and they worked out okay.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty, Martha Hilton, Broker) 5 months ago

Great information, Amanda! We've had several of them this past year and they always seem to work out - thank goodness!

Sharing best options for handling them is key to 'keeping calm' too - great job!

Happy Wednesday, Amanda!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) 5 months ago

Amanda great minds think alike I was going to write about this subject, now I do not need to you covered it here for the community, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) 5 months ago

Closing tomorrow on a home where the difference was split 50/50 bewteen the parties. The Appraiser did an excellent job but the comps were not there to support this one of a kind remodeled home. Still over $300 per sqft is hard to argure that the sellers did not get fair market value. The compormise worked the best for all parties.

Posted by Clay R. Seay (Florida Homes Realty & Mortgage) 5 months ago

Good morning Amanda S. Davidson,

Well written post my friend! Glad to see this one featured. A good topic to let the consumer know there are options when an appraisal comes in low. Its not a death sentence there are always compromises in life and a low appraisal is a good example! LOL!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) 5 months ago

I've always just ran around screaming until I found a garbage can to kick over. Thats not the right way?

Posted by Ben DeHaven, Proudly serving Winter Haven & Lakeland, Florida (Haven Realty & Investments) 5 months ago

Low appraisals are always a difficult situation in a transaction.  Your tips can help make them solvable.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) 5 months ago

Congratulations on the feature Amanda S. Davidson . This is a great topic as it does happen and a great explanation what the options are. 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) 5 months ago

Yesterday I received a call from a buyer in contract.  He wanted to know about the status of the appraisal.  Earlier in the day, his Realtor e-mailed me asking, "Where the hell is the appraiser???"  Mind you, we are 3 days into their escrow...

The reason I'm relaying this story is that they both thought the appraisal would come in low and that they could apply pressure to the seller. 

I think this puts into light that appraisers generally do a really good job of trying to support contract price and that when an appraisal comes in low, it's a good time for all parties to reflect not only about why, but what they can best do to keep things moving forward.

Posted by Rob Spinosa, Vice President of Mortgage Lending, Marin County (Guaranteed Rate, Marin County, CA) 5 months ago

This is good info. Thank you for sharing. 

Posted by Jake Donnelly, Jake The Mortgage Guy - 440-781-8808 (Liberty Home Mortgage) 5 months ago

Amanda, great post for homeowners and buyers experiencing a low appraisal.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) 5 months ago

I have also been able to dispute the appraisal especially on new duplexes where the appraiser is clueless.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) 5 months ago

Hi Amanda

It’s essential that sellers, and buyers, understand what their options are in the event of a low appraisal as that can and doeshappen. No one likes when this occurs but there are steps that can be taken to move forward if both parties want.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) 5 months ago

We've had some terrible appraisers here in Denver.  They will go out of their way to come in at a low value and routinely ignore comps in the quadrant that the listing is in.  

Posted by Kevin Mackessy, Dedicated. Qualified. Local. (Blue Olive Properties, LLC) 5 months ago

Elegantly composed post my companion! Happy to see this one included. A decent subject to tell the customer there are alternatives when an evaluation comes in low. 

Posted by Mr Fred Dorsey, Specializing in #Divorce #Probate&Estate (Douglas Realty LLC) 5 months ago

Also the buyer can challenge the appraisal. This occurs when all of the follow is true:1. Buyer wants the house bad enough2. Buyer does not have the funds to cover the difference.3. Seller refuses to lower price to appraised value.If buyer is VA, many times VA can and will increase appraised value due to the request of the vet.

Posted by Michael Brown 5 months ago

These are obvious solutions. Seriously? This is the headline story?

Posted by Jeff 5 months ago

The buyer or seller can also have another appraisal conducted on the property at a cost as long as the lender approves the second appraisial and you are able to provide comps to support a second appraisial.

Posted by Darren Lane 5 months ago

The other option, if the appraisal is way to low, and the lender will not cooperate with a second appraisal, is to change lender's and get a new appraisal.

Posted by Richard Foster, Broker Owner, BS, ABR/M, CREN, CRS, GRI, RRG, SFR (Nevada Perfect Homes) 5 months ago

Timely post. We just had this happen and I gave my Sellers the same options. It turned out none of it mattered because the appraiser missed a bathroom on his appraisal! problem solved and we close tomorrow.

Posted by Nathan Gesner, Broker / Property Manager (American West Realty and Management) 5 months ago

That is a pretty lame answer to a low appraisal. Yes, either party can just give in tot he appraiser. Is he God or is there anything to get it adjusted if warranted. Maybe the bank used should be managed, maybe require the buyer to apply at a known bank with an appraiser that might be know? There must be more than just lower the price or ask the borrower to com up with more money. You could have titled the article, "Yes, the appraiser is god" then just indicate there is nothing really to do about it. Of course the appraiser could be right, but usually not the case. Appraisers are the worst of the worst profession, in my humble opinion.

Posted by Chris 5 months ago

Often times the house was not priced correctly. I can't tell you how many times a Realtor has provided the appraiser with what they believe are Comps, when they are not. A Comp is an alternate property that the same buyer would have considered. A 3000 sq ft house is not comparable to a 4000 sq ft house. A $100,000 is not comparable to a $200,000 house. The job of the appraiser is not to validate the contract price. Its to establish market value. Just because a buyer is willing to pay a price, does not make it worth that price......and in the case of impact windows, the builder is incorrect . In Florida, they have value. In new construction, the cost approach is used. But the market data approach is the best indicator. Most builders are unavailable to the appraiser to discuss their costs. And they traditionally overcharge the borrower for lot premiums. If they would stop price gouging, there would be no issue with the cost of the impact windows . Just know that no appraiser wants to kill your deal. But there must be support for contract price. And any reconsideration of value must go through the lender, not the appraiser.

Posted by Appraiser 5 months ago

I have contested a low appraisal in the past by providing comps but don't count on it always being successful as you are basically saying the Appraiser doesn't know what they are doing, so be very diplomatic. I have also had to change lenders and get a new appraisal after working with the listing agent to allow the Buyer to make some improvements which brought the value of the home up above where it needed to be. The improvements were planned anyway but it was a gamble on the part of the Buyer as they could have lost the time and material expense of making those improvements. Wouldn't have been possible without good cooperation between agents who know what co-brokerage really means.

Posted by Jack Cornell Exit Realty Bend 5 months ago

I had a low appraisal and hired another appraiser out of my own pocket to do one, since there was a $30,000 difference. My appraiser said the first appraiser had to work hard to get the value to come in that low. First appraiser used a comp that backed up to a busy road and didn't give any adjustment to that comp. I shared it with the buyer's agent and the buyer lender. They shared it with the first appraiser and the first appraiser came back and upped his appraisal price by $15,000, which made it a little more bearable, but still hurt, especially with my seller's going thru a divorce. So the difference in sales price covered my cost of the appraisal and kept the deal together.

Posted by Susan Logan 5 months ago

We are currently sellers agent for a condominium Listed for $192,500 FHA loan, this complex it looks identical but buildings but only a few are condominiums and the rest are townhomes. Condo appraised for shockingly $183k which aporaiser took condo comps sold over 6 month old because these condos not many come on the market.se Now across the strest identical building ( townhomes) 3 sold for $190k-193k appraisal did not use those comps. We decided to dispute the apparaisal by providing the excat layout units that appraiser did not use across the street, afrer 3 days we received an answer stating it’s againts the law to use townhome comps for condominium comps, so condo appraisal stayed the same at $183k sellers were furious, we calmed them down by showing options, asked buyer to come up to $188 and we cN call it a deal. Buyers agreed we will close on August 1st.

Posted by Roberta Gjeloshaj 5 months ago

I have had 13 deals this year where the appraisal came in below the accepted price.  That is the way the rising market is with the low inventory here in the Boston area.  I know it is the same for many others.  What I do is prepare the Buyer and the agent with this information and to let them know of their options before the inevitable. This practice has saved each of these deals. In most situations the buyer being prepared had the extra cash and in only one have we had to negotiate and lower the price. Know your market, understand how appraisals work and never wait to be surprised, get out in front with the most relevent information.  Oh, and one final note, never let a bad appraiser in your house.  I have a "hall of shame" list of bad people at their jobs and when one of these people is assigned to my deal I let the bank know I want someone else.  Work with good people and work proactively to get a deal done.  It is better to close a deal than be right and poor because of it.

Posted by Larry Lawfer, "I listen for a living." It's all about you. (YourStories Realty Group) 5 months ago

It is always tough in our seasonal market, of custom built homes, to find great comps.  Appraisers here really have to know their stuff to come up with good, valid prices.

I am sure it is not an easy business - especially when the target is moving fast.

Posted by John Dotson, The experience to get you to the other side! (Preferred Properties of Highlands, Inc. - Highlands, NC) 5 months ago

Lately we've seen several appraisers invoking the Tidewater Initiative regarding VA appraisals.  Tough for a listing agent to deal with this, and something that has surprised the agents whenever this initiative is invoked.

 

Posted by Mark Davis-Cote, Broker-in-Charge, The HomesFinder Realty Group (The HomesFinder Realty Group) 5 months ago

Just wanted to add to comments the "appraiser" has already made. I have 32 yrs. experience on both sides. Most Realtors have not been properly educated in valuation, even with the intro. course that many take. The terminology used in these post is reflective of this. In more recent years, banks have switched to AMC's to handle appraisals. Fannie may now has a new automated review system call Collateral Underwriter. Banks and AMC's typically have their own set of appraisal guidelines and many of these have nothing to do with proper valuation practice and more to do with creating less work, less expense and fitting everything into a "box". The first line of review for most appraisals is being done by clerks, who are following a guideline sheet and have no knowledge of "valuation" at all. Additionally, the pay being offered by most AMC's does not allow an appraiser to be profitable. Most of the appraisers working with AMC's are rookies who don't know any better. To try and justify the low fees they're being paid, they rush thru the appraisal process focusing on making sure all of the "keep it in the box guidelines" are met, instead of doing a credible job! So that equates to three sets of guidelines, banks, AMC and Fannie. These Appraisers are more concerned about meeting these guidelines than a credible valuation because any one of these review systems will require re-work for the appraiser, who will then be taking a loss on that appraisal job. So if the consumer has something special about their property, they get screwed.

Posted by Realtor / Appraiser 5 months ago

Nice article Amanda! For what it is worth, with the current appraisal industry guidelines, the REALTOR and the local lender have no input as to whom is going to do the appraisal. While most appraisers are thorough and diligent, it is not fair to fault them when they use a comp that is only 2 blocks away from the subject, and for all intents and purposes is physically very similar. However, if the appraiser is not regularly doing appraisals in that area and perhaps lives 30-40 miles away, they may not be aware that the neighborhood 2 blocks away is in an entirely different school district, and unfortunately a district with sub standard ratings. This has an adverse effect on the outcome of the subject's value. If their is an appraisal contingency we routinely add a sentence that in the event the appraisal does not hit the contract price, the buyers or their agent will provide us with a copy of the appraisal. We can quickly ascertain if there is an "inappropriate" comp. If there is, then we have grounds to discuss a review appraisal with the appraiser. If not, then we move on to the choices in Amanda's article.

Posted by Scott Jones, GRI reMBA CREX CDPE GKC (J Scott Jones REALTORS) 5 months ago

There is another possible option, admittedly a long shot...appeal the appraisal. 

Posted by Dennis J. Zisa & Associates, Inc., 27 years in So. Jersey and the Greater Camden area (Dennis J. Zisa & Associates, Inc.) 5 months ago

One of  your anonymous commenters said it isn't the appraiser's job to justify the price. Interesting. Back when I was in broker clases I asked the instructor about that and he said it IS the appraiser's job to justify the price - if it is anywhere close. This is, after all, what a buyer is willing to pay.

I do agree with everyone about appealing the appraisal - but only if you as an agent have run the comps and honestly believe the appraisal is wrong.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) 5 months ago

Just a note to the anonymous commenters who have been rude: Go back to Facebook.

Here in the Rain we are respectful of each other. We may have differing opinions, but we don't consider it cool to say things like "These are obvious solutions. Seriously? This is the headline story?" or "That is a pretty lame answer to a low appraisal."

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) 5 months ago

No one has suggested that the seller get an appraisal done before listing their house. Especially if the situation is unique- lake or river property, extensive marshland, includes a dock, boathouse, etc., wouldn't an appraisal before listing save a lot of time and trouble?

Posted by Josie Schiazza 5 months ago

Good post.  Because the appraisers come from different areas per lender rules and do not know the local market we can have serious issues with low appraisals.  I am always happy for an appraiser to call me when they have questions about an local area where I list.  Come to think of it, I have not had a call for a while!

Posted by Elizabeth Y. Foulds, Your St Michaels Realtor (Long & Foster Real Estate) 5 months ago

HI Amanda, We teach a class on this to our new agents. Much of the problem is the house wasn't priced correctly and the seller was reaching. i thankfully have not had this happen often in the last few years.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) 5 months ago

Also I will share that to always have a list of the most recent solds in the neighborhood and give it to the Appraiser. Sometimes banks sends appraiser who are out of town appraisers who do not know the area as well. And if they don't know the area they can use the wrong comps. Using wrong comps will more than likely end up sabatoging the deal. 

we Real Estate Professionals hate working months on a deal only to see the deal fall through. Great post on "How to handle a low appraisal. #Howtohandlealowappraisal

Posted by Lanre-"THE REAL ESTATE FARMER" Folayan, I don't make promises.I deliver results.SOLD HOMES (Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC) 5 months ago

Hi Amanda S. Davidson - I have two point to make. First these anonomous comments mean absolutely nothing to me. They could all be from the same person. If you can't take the time to put your name to it, why should I read it? JMHO....

 

I have had a bunch of listings close this year and none came in below the agreed upon price. In other words, the contingency clause could not be used.  

Why? First of all, I meet the appraiser at the home, I provide them with the comps I have done and the amenities in the home. Teach them about the area, if they are not familiar with it.

Secondly, I do my very best to evaluate the property based on comps available. This way I can justify my positioning of the property.  I will and have gone back to the appraiser and asked for the comps that person used and present the comps I use to see if there is a disconnect. I also make sure that upgrades and amenities  have been accounted for in the appraisal. Basically, I want verifiable details of how the appraiser came up with the analysis. 

If there is no room for negotiation on the part of the appraiser, I ask the seller if they want to get another appraisal.  

Additional point:

If the property is so unusual that you have to go out of the area to get any reasonable comp, I might ask the seller to have an appraisal done, so that we have a solid base for a future negotiation.  If the seller decides to price the home higher, I tamp down the expectations and agree with them on a strategy to position the house appropriately for the market. 

I have not had the issue of disappointment but if I did.....

it would be because the seller didn't listen or didn't want to hear what I told them. 

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) 5 months ago

As you pointed out, there are many options when an appraisal comes in low. Seller can come down in price, buyer can pay the difference, seller/buyer can split or buyer can walk. This is after any potential re-look at appraisal. A low appraisal is often NOT a death knell.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) 5 months ago

I have a personal relationship with 3 appraisers in my area, you can just imagine what they say about this issue. 

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) 5 months ago

I think this was well written, yes some appraiser take it as a personal attack if you question their assessment. But Dodd-Frank did not give them the power to be infallible or questioned which I think sometimes some of the feel that they can no longer be challenged with a value.

Posted by Melissa Mason 5 months ago

Great post!  All good points after receiving an appraisal as buyers and sellers have to compromise.  But it's always best to ask gatekeeper questions before they arrive as appealing an appraisal is SUPER difficult as an appraiser would have to admit a mistake, not likely to happen. 

 

Having hosted appraiser classes 3 different times, 2 day courses, I can say that much of the responsibility actually lies with the listing agent.  The listing agent is the first gate-keeper in the transaction as they allow access. 

 

The first question a listing agent should ask relates to geographical competence. Have they appraised in this area before.  It might not make a difference in small towns, but in our "town" of over 400 square miles it makes a big difference!

The second question is have they appraised homes in this price range?  That will tell you if they have appraised luxury, if indeed you have a higher priced home or something different than the average home.

If the home has solar panels or energy efficient features, this is just plain competency.  If they haven't appraised homes with either and don't know what the PVValue Tool is, reject them till you find a "green qualified" appraiser.  Of course this is my specialty and in my courses!  

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) 5 months ago

Dealing with a low appraisal can be tricky. I had one last year when everyone--both agents, sellers, buyers and the lending bank thought the appraisal was way too low--significantly under list price!  Appraisers do not like to be questioned. Still, in a market where so many buyers are going over the asking price--having an accurate appraisal is key.

Posted by Mary Hutchison, SRES, ABR, Experienced Agent in Kansas City Metro area (Better Homes and Gardens Real Estate-Kansas City Homes) 5 months ago

I had a low appraisal for an FHA buyer this spring.  The listing agent was reaching by trying to claim that the upstairs/attic was finished space.  It had no flooring, no heat or cooling, and the drywall seams were taped, but not finished.  The appraisal came in at $6000 below the agreed price.  Note also, our agreed price was $9000 off the listing price!  So the agent was $15,000 off in the value.  My buyers were forced to walk away when the seller refused to lower the price to meet the appraisal and the buyers were unable to come up with that much extra to buy the house.  The house came back on the market and is still there.  The agent corrected the square footage and removed the FHA/VA availability, and ultimately lowered the price by $5000, still $1000 above the APPRAISED value.  It has been six months and only recently, the agent changed the picture of the house to one without snow.  You cannot make this stuff up.  In the meantime, my buyers found a much better home that was also less money!  They closed a couple of weeks ago.  It all worked out in the end.

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) 5 months ago

I am an appraiser and a real estate agent. I believe that setting proper seller expectations in an increasing market is critical. Don’t tell the seller “it’ll sell at any price in this market”. You’ll be setting up a low appraisal situation described in the article. RE agents should provide comparables to the appraiser that they believe are quality comparables. Don’t just hand them the most expensive homes. The agent can make their notes on why they think each is better or worse than the subject. In an upward trending market very fresh comparables are critical. Active and pending sales should also show upward trends. Days on Market will also show how strong the demand is in that area. So the author is correct on the four ways to handle a low appraisal, but also remember that it is critical to explain these to the seller and set proper expectations up front. Agents should set expectations with the buyers too. Another reality is that cash is king in a rapidly rising market because the seller doesn’t want to worry about a low appraisal. So overall, don’t freak. Proper seller and buyer expectaiins will win the day.

Posted by Scott Hamilton 5 months ago

Another good one filled with information I didn't know. Thanks for sharing.

 

Posted by Tonya R. Taylor, Tell me 1 thing you want to learn about marketing? (SavvyBizBuilder.com) about 2 months ago

Tonya R. Taylor thank you! Have a great day!

Posted by Amanda S. Davidson, Alexandria Virginia Homes For Sale (Amanda Davidson Real Estate Group) about 2 months ago

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