South Florida Home Appraisals Carry Less Weight in Today’s Market.
Many have seen the appraisals not measuring up in our fast changing real estate market over the past few years. In today’s market place, many buyers really don’t place much stock in what the appraised value of a property which they are wishing to purchase. Because of limited supply and rising prices many home buyers have little choice but to pay more than the appraised value.
Sellers are very unwilling to renegotiate the contract because the appraisal came in lower than expected. They will just move onto the next offer or a back up offer they have in hand. The home Buyer will typically come up with more cash to close whether they are financing or not. As long as they plan on staying in the home for more than a few years it is kind of a moot point. Any homeowner that is putting at least 20% down will not be at risk of owing more than the home is worth. So even if it is a little painful it will be worth getting the home.
Many Realtors, Sellers and Buyers have voiced their concerns because the appraisals have been lagging behind the hot real estate market. With more homeowners listing their properties that should level off now that the market is far more stable than it was when it was bouncing off the bottom. Increased inventory will slow or cool the price increases; giving appraisals a chance to catch up and give a true valuation of the property.
In many areas you will now see the appraisal come in at the purchase price and occasionally it will even exceed the contract price. Many times it just depends on how badly the Buyers want the property, how many properties they have looked at and how willing are they to continue their search. With the consumer confidence you see in our local real estate market and no reason for it to change anytime soon; both Sellers and Buyers are willing to bend the rules for the right reason.