I’m beginning to see and experience sales fail due to appraisals not meeting the sales price; I think this will become more problematic as time passes.  Some homeowners are selling extremely low to get out of the game in anticipation of a worsening market, other homeowners having to sell short……. there’s the homeowner that is having to reduce his price significantly to stay competitive with the surplus of homes on the market (especially with the abundance of new construction)….. and then the paranoid home buyer fearing that he’s paying too much and should have waited.  With all this, layer in the fact that not all homeowners are able to reduce their price to the buyer’s expectations without having to sell short. NOW we have appraisers getting too tight on the appraisals. The appraisals coming from the banks in particular seem to tighter than others.

I am currently in a situation where the appraiser measured the rooms of the home and rounded the numbers down, whereas the listing, taxes records and sale price w ere  based on the  county measurements that had been rounded “up”.  As a result the appraisal measured 27 feet less than what was noted on the tax records and it resulted in the home’s value being diminished by $4,300 due to the difference in sq. footage. I disputed the report since this difference would be enough to save the sale but the appraiser, because of a percentage of error allowance stated the difference was mostly covered in the variance contractually allowed and so the adjustment would make little difference.  He wouldn’t adjust the appraisal.

As the market begins to improve, buyers are going to be willing to pay more for a home than the neighboring sold comps; that’s part of the recovery of the housing market.  However, unless those buyers have cash or larger down payments the buyers we need to jump start our housing economy are going to be fighting the appraisers, and desperately needed sales will fail.  If the appraisers continue to tighten the grip, our housing market will become more suffocated and motionless at a time that it would be just beginning to breath.

- Kristie