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 their Home Price Perception Index (HPPI), Quicken Loans measures the 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 Markets at Quicken Loans urges 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. Home Buying Checklist
4 Tips To Get That Home Sold ASAP
When homeowners ask how to get a home sold, there is typically more to the question. For instance, some really want to know how to get it sold quickly, some are wondering how to sell a home to get more money out of it while others have a home languishing on the market and just want to know how to get the thing sold. Home Buying Checklist
There’s no mystery to getting a home sold; it all starts with basic real estate principles and practices. Home Buying Checklist
It’s important to know the current trends in your local real estate market before putting your home up for sale. Is it a buyer’s market – where there are more homes available than buyers? Or is it a seller’s market, with few homes available and lots of buyers? Home Buying Checklist
Your local newspaper most likely covers your regional real estate market but this is also information you can obtain by asking your real estate agent. Home Buying Checklist
This information is important for several reasons:
• If you can afford to wait to sell your home, the current market may be the deciding factor as to whether you sell it now or wait.
• It helps you price your home appropriately. Home Buying Checklist
• It gives you an idea of what to expect during the time the home is on the market.
Another aspect of timing the sale of your home is the season. Home sales are seasonal and the ideal time to sell the home is in spring. This doesn’t mean, however, that homes don’t sell at other times during the year, even in the dead of winter.
In fact, although fewer homes are listed and sold in winter than in spring, the likelihood that you’ll sell your home is higher in the former than in the latter. Home Buying Checklist