Weichert Realtors, H.P Greenfield
Hope that helps!
Yes, appraisals are based on comparable sales. It sounds like you are concerned that you might be paying too much for the $500k home. Is that correct?
Your realtor will probably be willing to provide you with her own market analysis and communicate with you and your lender about the value of the home you are buying. If your realtor can find comparable sales to support the value, so will the appraiser. If several recent sales support the $500k price on the home you are buying, the appraiser might not need to consider the one that sold for $485,000. That $485k home could be an anomaly among the other sales in the area and also might be underpriced.
If the appraisal does come in low, ask your lender how that will affect your loan. The outcome also depends on the language of your sale agreement. Review the sale agreement with your realtor. Ask her what your options are if your appraisal is low.
For the most part and especially in Valencia.
Wait til the appraisal comes in and deal with it then.
So Cal Homes Realty
CA DRE License 01312992
Graduate REALTOR® Institute,
Real Estate Masters,
Certified Distressed Property Expert,
People now are doing their best to drive prices back down. Appraisers are trying to keep prices down.
Comps and appraisals are different animals. The appraisal wins when it comes to financing. If a seller will not accept the amount that a loan can be gotten for they may be trying to sell for a very long time indeed.
For an appraisal to be accurate it should be based on the local market from the perspective of several similar properties. We wouldn't lose sleep over the sale of one property. On the other hand, if all of the comps come in under your projected purchase price, there could be a problem.
This is a time for agents and owners to price homes accurately since banks will not finance homes that do not appraise for the contract price. As difficult as it is fo sellers to accept, listing prices need to be as close to the appraiser's numbers as possible...to avoid your specific concern.
If the property doesn't appraise for the contract amount it may be time for the sellers to get real about their pricing and make some adjustments.
The Eckler Team
Based upon all of your questions to this community over the past month or so, leads me to believe that you are not using a local Realtor to represent you in your purchase. A good Realtor can help you navigate and avoid issues throughout the home buying process.
Regarding your question today, appraisers will use more than one comp in valuating the property. Should the appraised value come back lower than your purchase price, you will have a few options. 1) Ask the seller to reduce the purchase price 2) Increase your down payment 3) Walk away from the deal based upon your appraisal contingency that I hope you have in place.
Best of luck!
There are a whole new set of appraisal rules being fought by the National Association of Realtors. The guidelines are such that a person may be doing the appraisal that has no local knowledge. The comparable sales if the number one criteria used for the judgement of the value of a home. The true test is comparing like to like. Same size, location, condition would be ideal. Unfortuately the home you are speaking of will not have a video and will help to set the appraised value of your home.
Your Realtor should know the current market value as well as how many offers you are competing with. There is a lot of competitiion for home is great locations in the Santa Clarita Valley. My personal opinion is that not buying now will leave a lot of buyers wishing that they had!
Jennifer Ricco CDPE, PSC, Retired LAPD
Keller Williams VIP Properties
25124 Springfield Court
Valencia, Ca 91355
Your description of the situation should be a concern, but I would try hard not to worry too much until that appraisal report comes back to your lender. Each appraiser is different, and so is every house. It's possible there are other comps that you're not taking into consideration, that the appraiser will, that will favor the sales price you are under contract for. Appraisals "not coming in" at the agreed price has def. been happening more often over the last year, but just because the same floor plan sold for $15k less than the home you are in escrow on in recent past, does not mean your appraisal will "not come in" at the value you're looking for.
It's great that, at the very least, you're aware of what could happen in a real estate transaction, and being prepared, and having a plan B...is something that all buyers should have. Working with a good Realtor, also helps.
- Robert Mickalson, Realty Executives