Appraisal problems in this hot real estate market
My clients closed on a wonderful home in Sarasota today. While negotiating the contract, we were competing with other buyers and bid the home up about 5% over list price. Multiple offers are common in this hot real estate market. Homes not appraising at or above the sales price is also common. This usually occurs because there are no good comparable sales in the area. My buyers were required to put a little more money down. Remember, an appraisal is one person's opinion of value. It can be debated and a second opinion/appraisal can be obtained.
2 Comments:
Appraisal Problems or Brokerage Problems?
You are right, an appraisal is an opinion of value…the numbers are based on factual data and if it is correct, it should not vary with a second appraisal. Many people confuse “price” with “value.” Just because you can find a buyer that will pay a higher price, does not mean the property has a higher value. An appraisal is based on the theory of substitution. It is a buyer’s choice to pay a price above the value for personal preference over a similar comparable property. It is a broker’s job to find alternative properties for a client so they don’t have to overpay.
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