Buying or Selling a home can be an emotional and arduous process! In addition, recent market changes have created a new and reappearing trend regarding appraisal issues.
One report by the NAR gathered data and estimates that roughly 35% of REALTORS have experienced an appraisal that negatively impacted the transaction of buying or selling a home.
Who should pay for the discrepancy between the transacted price, and the appraisal? We have shifted in our Market, our properties are selling to quickly, many within less than a weeks time on the market! With that, comparables are hard to find from months ago- homes from 1 to 6 months back are not supporting our new, increased sales prices- and the gap between list price and sales price is nearly gone.
In our Sellers Market today it all depends on the situation. Unfortunately, many Sellers have to realize what they want for the house and what they need for the house sale, are not always what the house will appraise for. If the house doesn't appraise the bank cannot give a loan to a Buyer on the amount that is higher than an appraisal.
If the house is still to sell, who should make up the shortage? Sellers ? Buyers? The answer today is negotiable. Out of my last 12 sales, 11 of the appraisals came in short. Having the conversation upfront and realizing this may be a hurdle to overcome in the transaction tends to help with the negotiations and expectations later!