Appraisals Catching Up to Rising Home Values
May 16, 2013
In recent months, real estate professionals have had to hold their breath as they waited for an appraisal on a property to come back. Would it be lower than the agreed-upon selling price -- and by how much?
Many real estate professionals have blamed a high number of derailed transactions on low-ball appraisals.
But now the industry is noticing a change in appraised values: Appraisals are getting more in line with the agreed upon selling price, CNNMoney reports.
Appraisers are valuing homes at or above their selling prices as home prices nationwide climb and inventories of homes decrease, says Lawrence Yun, chief economist for the National Association of REALTORS®.
For example, in Wallingford, Wash., real estate pro Michael Ackerman told CNNMoney that he was concerned a transaction would fall apart when a buyer agreed to pay $755,000 for a home since other comparable homes in the area had sold for $690,000.
“Everybody’s jaws dropped” when the appraised value came in at the full, agreed-upon selling price,” says Ackerman.
In some cases, appraisals are even coming in higher -- which was practically unheard of just a few months ago. For example, real estate pro Cara Ameer in Jacksonville Beach, Fla., says with home prices in the area rising 15 percent over the past year, she was concerned the appraisal on a two-bedroom townhouse wouldn’t reflect the current rise. A buyer offered to pay $5,000 above the $189,000 asking price. The appraisal came in above the selling price, Ameer says.
Source: “Home appraisals no longer derailing sales,” CNNMoney (May 15, 2013)
Updated: August 16, 2019