How Does A Low Appraisal Affect You Selling Your Home

In this housing market in charlotte; coming up with a value sometimes is a very difficult task. With so many short sales and bank owned properties being sold the value of a home is subjective. I have talked to many sellers who believe the value of the home is more than what the market is willing to accept right now based on improvements they have done to the house. But, a home is worth what someone is willing to pay for it and what comparable homes in the area sold for. There are Realtors that will price a home higher than the value of the neighborhood in the hopes of getting a little more for theirs based on the condition of the house. When this happens you subject yourself to the mercy of the appraiser. The appraiser is an independent licensed appraiser who is not affiliated with the bank or any party to the transaction. It is there job to arbitrarily justify a price and compile supporting data to support their decision. So what do you do if the appraisal is less than the sale price of the home? A bank will not loan money greater than the appraised value of a home. And a buyer in this market will not pay over appraised value of a home. So, what do you do if you are a seller and have agreed to terms with a buyer and the home does not appraise? Most sellers will work with the buyers to come to a happy median with price and concessions and make the transaction fit. But what if the seller is not willing to concede? How does this hurt them? If the appraiser was doing a loan for an FHA loan and the neighborhood is predominately FHA financed homes it could be disastrous to the seller. An FHA appraisal will stay with a home for six months from the appraisal. So, any other buyer comes in that appraisal (if they are doing an FHA loan) is the one the mortgage lender will use regardless of who they are using to do the financing... If you have an appraisal on your home that comes in lower than what you are looking to sell for; weigh the options before saying NO. It could prevent you from selling your home in the near future as well. Dave diCecco Realtor/Broker www.davedicecco.com