Home values are rising. This is not a big secret. We are in a situation where supply is low and demand is high. That’s right, it’s the old Law of Supply and Demand which is causing home values to rise. This is bad news for the buyers. But it’s good news for the sellers. Or is it?
With many experts projecting home values to rise another 5% in the next twelve months, you will probably get more money when you sell. But there is a major hurdle you may need to overcome. And that is the bank appraisal.
When you apply for a mortgage, rightfully so, the bank wants to be sure they are not lending more than the property is worth. The way the banks do that is to have an appraisal done on the property. And since the banks want to be sure that they maintain their record profits, they have the prospective buyer pay for the appraisal. But, due to the rapidly rising sale prices of homes, the appraisers are having an issue with finding adequate comparable sales to defend the selling price. And if the home under appraises, the buyer has to come up with extra cash for the down payment. What happens more frequently is that the buyer demands that the seller make a price reduction to allow the sale to go forward.
We will now pause for a word from our sponsor.
When you need an experienced Realtor, look no further than to Bunny and Art Reiman. Long noted as one of the most successful real estate team in Monmouth and Ocean counties, Bunny and Art can help guide you through the process to get to a successful closing of your property. Visit their web site, www.55plusinocean.com
To continue, when you sell your home, first you must sell it to a ready, willing and able buyer. Then – quite often – you must sell it to the bank with a good appraisal.
Give us a call – we can help.