In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.
If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.
Every month in theirHome Price Perception Index(HPPI),Quicken Loansmeasuresthe disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.
Bill Banfield,VP of Capital MarketsatQuicken Loansurges anyone looking to buy or sell in today’s market to remember the impact of this challenge:
“While a 1 or 2 percent difference in home value opinions may not seem like a lot,it could be enough to derail a mortgage.
A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”
The chart below illustrates the changes in home price estimates over the last 12 months.
Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.
Author:Connie White Phone: 843-532-3356 Dated: July 20th 2017 Views: 107 About Connie: My personal venture into real estate was driven by the desire to provide an enjoyable environme...
View our latest blog posts in your RSS reader. Click here to access.
Charleston Homes Real Estate is Charleston's premier brokerage team. We truly listen to our clients and have a clear understanding of our marketplace, which is why we can provide superior service and results- whether you're selling your home, a first time home buyer, experienced investor, or somewhere in between.
Updating your front door is an easy way to make sure your home stands
"Connie White recently helped me sell my home in West Ashley. A friend used a Realtor in NC and had a good experience, so when I needed to put my home up for sale, I searched the internet and an amazing website which put me in contact with Connie. That was the best possible bit of luck! My father and I owned the home together, so all decisions had to be made by us plus my husband, and none of us live in the Charleston area. With little money to do any repairs or updating to the home, Connie really had a very difficult task. She was absolutely wonderful to work with, patiently working with us and counseling us what to do to sell the property. She stayed in constant contact with updates and followed up with potential buyers in a timely way. I would highly recommend her to anyone looking to sell a home and am happy to be a reference if ever needed.