Over the past few months, with rapidly increasing prices in the Sacramento area housing market, one of the big issues for buyers and sellers is getting an appraisal which matches the sales price.
We worked with a young couple who had six offers rejected before finally getting into contract on a very nice home in Roseville. When their loan appraisal was completed, we learned the appraiser valued the home at $20 thousand less than the contract price. We tried to negotiate with the seller by offering accept only a $10,000 reduction. He refused to negotiate and the young couple lost the house.
This type of appraisal issue has been a common story among real estate professionals. We have been holding our breath waiting for an appraisal to come back. Will the appraised value be lower than the agreed to sales price and if so by how much?
According to a recent CNNMoney report, appraisals are getting more in line with the agreed upon selling price. The report goes on to quote Lawrence Yun, chief economist for the National Association of REALTORS, ‘Appraisers are valuing homes at or above their selling prices as home prices nationwide climb and inventories of homes decrease.’
We are currently waiting for a number of appraisals and I am not as confident as Lawrence. Prices have increased so quickly there are very few cases where there are comparable sales which support the new higher prices caused by increasing demand and low inventory. We are holding our breath and waiting.
If you or someone you know is considering buying, please feel free to contact me MagnumOne Realty office in Roseville at (916) 276-6883 and email at [email protected].
We specialize serving the needs of buyers and sellers of homes in the Roseville and Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.