Over the past few weeks we have noticed the NW Michigan Real Estate appears to be the top relating to the price sellers and buyers agree to. We have noticed that real estate appraisals are coming in short of the purchase agreement price. For example, a sale price agreed to of $225,000. The appraised value comes in lower, say $217,000. At this point the transaction is at a stand still. A few options for both parties at this time, seller decides to sell at $217,000. The buyer decides there is value there and brings more money to closing to fill the gap between agreed to price and the appraised value. In this case, $8,000. Or the transaction does not go forward to closing and the real estate is put back on the market.
If the property is put back on the market sellers risk the same scenario with the next transaction. History often repeats itself, back on the market trend.
We have been seeing more of this the past 2 weeks and this indicates to US that the lack of inventory for buyers to purchase is pushing purchase prices higher.
Appraisers are charged with finding comparable properties to keep the transaction moving forward to close. If they can not find them, the result is an appraised value that misses the target value. In simple terms, the appraiser works to keep the transaction moving, if they can not find the comparable properties to justify the price, they most likely are not out there.
It is very important to seek out the best Realtors in your market area. They can provide you with the best information relating to price without hiring an appraiser before you list the property.
THE DIFFERENCE, a comparative real estate market analysis provided by one of our Realtors lets you know how much similar properties to yours in the same geographic area are selling for, while a real estate appraisal is the value your individual property has, according to a licensed, professional appraiser.
Being a part of the Back on the Market trent is not the best position to be in where the value of the real estate was not found.