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How Can You Handle Common Appraisal Issues?

What happens when an appraisal doesn’t match the agreed-upon price of a home? Today, we’ll discuss how buyers and sellers can overcome appraisal challenges during a transaction.

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When appraisals are involved in your real estate transaction, there are a couple of issues that can arise that I want to point out to you today.

Unfortunately, some real estate transactions will have an appraisal that does not meet the home’s market value. That can be a messy situation when you have deadlines and contingencies involved.

Luckily, there are a few options for buyers and sellers to avoid this.

First, it’s important to know there’s not an exact science for appraisals. You can hire 10 different appraisers and get a 10% to 15% difference in value on either end of the spectrum. The appraisal is only another person’s opinion of your property’s value, anyway.

A buyer will pay true market value for your home. However, a bank can’t lend on whatever a buyer is willing to pay. The bank needs some way to protect itself in the instance that a buyer defaults on the loan and cannot make the payments. Appraisers are hired mainly to protect the bank.

You can hire 10 different appraisers and get a 10% to 15% difference in value.

What can you do if the property doesn’t appraise? As a buyer, depending on the loan, you can make up the difference, renegotiate with the seller, or terminate the contract. Unfortunately, as a seller, you can’t terminate the contract. However, you can negotiate or drop the purchase price down to the appraised value. You can also decide to proceed with the agreed-upon price.

Can you correct an appraisal if you feel it’s wrong?

Sometimes, we can get the appraiser to correct the report if something is blatantly wrong. Other times, the appraiser won't admit a mistake. I’ve even seen an appraiser not include the value of a pool on the property! That’s a lot of money that went unaccounted for. Sometimes, the bank will reject a report that is obviously wrong, but more often than not, they’ll go ahead and accept the appraisal.

If you have any questions about how to deal with appraisal issues or you’re thinking about buying or selling a home in the McAllen area market, give us a call or send us an email today. We would be happy to help you!

Should You Sell Now or Wait Until Spring?

Although there are pros and cons to selling in any season, there are a few benefits to selling now rather than waiting for the spring market.

Want to sell your home? Get a home value report
Want to buy a home? Search all homes for sale

Many people think that the only good seasons to sell your home are the spring and summer. In fact, many homeowners wait to put their home on the market in spring rather than listing right now.

Ultimately, there are pros and cons to selling your home in any season. However, selling now instead of waiting for spring could be extremely beneficial.

The price of any item, including residential real estate, is determined by supply and demand. If many people are looking to buy an item and the supply of that item is limited, then the price of that item increases.

With low inventory and high demand, you can sell for top dollar.

According to the National Association of Realtors, the supply of homes for sale increases dramatically each spring. In fact, last year, inventory climbed steadily from January to May, culminating in 270,000 homes for sale. It makes sense to get ahead of the competition and list your home for sale now, while home prices are still high.

Also, buyers who are in the market during the winter months are highly motivated; they want to buy now. Since inventory is limited in most markets, sellers are in a great position to negotiate.

If you have any other questions about selling your home in the current market or about real estate in general, give us a call or send us an email. We would be happy to help you!