Real Estate Appraisals: What Sellers and Buyers Should Know

What some sellers and buyers do not understand is that a home appraisal can kill some deals.

Sellers must realize the home should be priced within a reasonable range of the appraised value. The reason is that a buyer may want to purchase the home at a higher price; however, the mortgage company may deny the loan based on the appraised value of the subject property.

Three common issues to be aware of as it relates to home valuation/appraisals:

1) In areas with many foreclosures and short sales, appraisers are sometimes left with little choice but to include them in the comparable analysis. This tends to reduce the appraised value of the subject property. Certain states that have a large number of distressed property sales, such as Florida, should be mindful of this.

2) Lower the credit score and/or the higher debt-to-income level, the greater the scrutiny of the colleral's value (i.e., home valuation). If there is some uncertainty, the extra focus on value could impact whether or not the lender approves the loan at the appraised value.

3) The fluctuations of the market can make some sellers apprehensive about selling at market value as they may start to believe the value will appreciate.

Sometimes sellers tend to want to get as much for the home as they can. And this is reasonable; however, it may wind up killing a deal when a lender is involved. On the other hand, some buyers fall in love with a home and are willing to pay more than fair value. If the buyers have "iffy" credit history or "just enough" to meet the loan-to-value requirements for a loan, they may be denied by their lender.

Please see some of our previous pieces on home and market valuations.

If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.

Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100

http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser

Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty