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 theirHome Price Perception Index(HPPI),Quicken Loansmeasuresthe 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 MarketsatQuicken Loansurges 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.
Author:Ronald Buckley Phone: 513-992-3333 Dated: July 13th 2017 Views: 15 About Ronald: Professional Service With a Personal Touch
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Coldwell Banker West Shell is one of the largest and
most successful real estate companies in the greater
Cincinnati & Tri-State area. With approximately 550 sales
Associates and staff located in 8 regional office locations, the
organization serves consumers in Cincinnati and the
surrounding region. Coldwell Banker West Shell is part
of the NRT family of companies. NRT, LLC is the worlds
largest residential real estate brokerage firm.
Our global connections and local success are a
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The firm's first residential real estate office opened in
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Over the past decade, Coldwell Banker's closed sales
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