Lately, more than one third of home sales have been held back due to real estate appraisals. This was according to a survey done by the National Association of Realtors; an organization which is composed of residential and commercial real estate broker, immovable property managers, real estate sales people, appraisers and real property counselor.
In the survey, about nine percent of the agents that were asked said that their contract were delayed because the appraisal was below the negotiated price for the property, and about fifteen percent said that their contracts were negotiated to a lower price, and about eleven percent said that contracts was cancelled because of the low appraisal.
This low appraisal of a property would sink the deal especially if the buyer was counting on a financing from a bank or a lending company to purchase the house. And since banks and lenders would require for a an appraisal to verify the market value of the house then the banks or lenders will not grant a loan which is more than the appraisal of the home. But there are other things buyers and sellers can actually do even if the appraisal is lower than the agreed price.
First off, a seller can look for error in the appraisal report that might have resulted to the low appraisal; double check the record if they put on the correct area of the home, the correct number of rooms, other amenities of the house, upgrades and improvements done that might increase the value of the property.
Then you may ask the appraiser to re-evaluate and reconsider the evaluation made if you think that it was not accurate, like if the appraiser may have used foreclosures and short sales in comparing for valuation purposes and the prices of these homes could actually affect your home’s appraisal.
Or you may ask for a second appraisal especially if the first appraisal was made by someone form out of town and would probably have no idea or was not that familiar with the market in your area. If you want to be sure, look for a certified appraiser in your area and you may pay for your own appraisal and if the valuation is higher you can use it to contest the previous appraisal.
But if you are the buyer, you may try to renegotiate the price when you do not have enough cash to cover the difference of what the bank can loan you and the negotiated price of the house.
If you really want a smooth deal in selling your house without getting hurt with a low appraisal, then just prepare your home and do a little tweaking and cleaning to increase the value of your home because a messy and cluttered home can hack off hundreds and even thousands of dollars from you property’s value.
But you don’t also have to spend hundreds or thousands just to redo the house just to impress the appraiser. All you would need is to; first, keep your yard clean and if the lawn has overgrowth, obviously you need to mow it, then keep all parts of the house clean, fix the light and remove the trash, lock the pets in the cage because it might annoy the appraiser and would just look for the flaws of the house instead of its good features. Make the space look bigger, remove big, bulky furniture and open the windows and keep the whole house well lit.
If you think your house has a special feature, like a Jacuzzi or a large closet or other special things then point it out to the appraiser.
Well, again a little cleaning and creativity would help a lot to boost the value of your home and you would probably not go through the hassle of negotiating and haggling for the value of your home.
About the Author;
Georges Kfoury is the founder and Chief Executive Officer of Leaderscorp Financial Inc. headquartered in Rancho Cucamonga, CA, a leading provider of mortgage financing dedicated towards providing affordable home loans. He founded the company way back 2003 from a ground level, without having the mortgage background. In spite of this, he was able to immediately take the company a level of generating annual income ranging from 8 to 10 million dollars.