First, it was toilet paper; now, it’s real estate disappearing fast. In today’s hot market, inventory is low, and demand is high. At all price points up to $2 million, there is barely a two-month supply of guard gated real estate. For homes priced between $2 million and $2.5 million, there’s only a three-month supply—and there’s not much more than that for homes in the ultra-luxury segment of homes priced over $3 million. While this might be frustrating for buyers, it’s excellent news for sellers looking to fetch top dollar.
However, rapidly appreciating prices are causing challenges when it comes to appraisals and loans. If your buyer is paying cash, an appraisal is unnecessary and shouldn’t be an issue, but not all buyers are paying cash. If your buyer is getting a loan, their bank will require an appraisal, possibly two. Why is this a problem? Banks lend money as a percentage of the appraised value. If the appraiser says your home is worth less than the purchase price, the loan will be smaller than expected, and the buyer must cover the balance. This might not be a problem for all buyers, but it may cause doubts about the value of the home they’re buying. They might want to renegotiate the price, and the deal could even fall apart.
With over eighteen years of real estate experience, I know the best way to minimize your odds of an appraisal problem happening. If you want to take advantage of the favorable market conditions to get the highest price possible for your home, you need an expert to sell your house AND close the deal—the part where you get your money. Give us a call. We look forward to helping you.