Appraisals on Homes For Sale in Saint Augustine Florida-The Good, The Bad, and The Ugly

Appraisals on homes for sale in Saint Augustine Florida, without a doubt, are a good idea. Without them, the potential for mortgage fraud would be rampant and housing prices would more than likely inflate at a rate that the average consumer would never be able to keep up with.  There are also some problems with having an appraisal performed on homes for sale in Saint Augustine Florida that everyone should be made aware of.

THE GOOD

Think of appraisers as a disinterested third-party. They have nothing to gain or lose (they get paid either way) for coming up with a certain value on one of the homes for sale in Saint Augustine Florida. Their main function is to be sure that the sellers, buyers, and agents are not colluding (or acting alone) to take more money for the house than it’s worth. The lender is giving the buyer a lot of money and they are taking every precaution to ensure that they don’t lose money on the transaction (like any business, their goal is to make money).

Before the housing crisis, appraisers were much less restricted than they are today. Sadly, there were some appraisers that took advantage of this and they were a piece of the puzzle that helped decimate the housing market and affected all of the homes for sale in Saint Augustine Florida

THE BAD

After the housing market crash, appraisers took a lot of heat for overvaluing properties nationwide (and especially in some of the more famous crash-markets such as California, Florida, and Nevada). By overvaluing properties, lenders were able to justify larger and larger prices for homes for sale in Saint Augustine Florida and as housing prices continued to inflate, the bubble was just waiting to burst.

Since the crash, appraisers have had to perform under tighter standards than they were used to. This, in many cases, has had a negative impact on appraisals. Homes for sale in Saint Augustine Florida that should appraise (or meet value) are not appraising and buyers, sellers, and agents are at times frustrated and at a loss. It’s not uncommon for an appraisal to scuttle the sale of a home these days.

The basic reasoning is that lenders have placed a lot of blame on the appraisers and make them more responsible for “erroneous” appraisals. If they overvalue a property, they risk losing the banks business if the home were to foreclose and be found to be valued at a lesser price. This sets up a dangerous situation where appraisers are afraid to value a property too high, so they may just undervalue the property for safety’s sake.

If you’re buying one of the homes for sale in Saint Augustine Florida for $100,000 and the appraisal says the home is only worth $90,000, it’s up to you and the seller to come to terms (lowering the sales price) or you to make up the $10,000 difference…or back out of the deal. None of these are good situations, so you can see how an undervalue appraisal is something most people don’t want to see.

THE UGLY

A problem that has crept into the market with regard to appraisals within the past several months has to do with the fact that the market is changing once again.  We have gone from a market that favors buyers to a market that favors sellers.  Prices of homes for sale in Saint Augustine Florida are rising, in some areas a significant amount.  The listing prices are out pacing the appraisers’ values.  This is through no fault of the appraisers but rather if you go back and look at the “sold” transactions for the past 6 months they are far lower than what houses are selling for now.

Hope is not completely lost if you receive an appraisal below what the contract price is.  When these situations arise, it can be very frustrating for all parties involved and it’ll definitely help you to have a good agent at this point, as the contract is now in danger of falling apart (no loan more often than not means no purchase). Some remedies can be performed to try and get both parties back to the negotiating table, but it can be tough.  It takes experience and determination.  TEAM JOHNSON has both.  We can assist sellers and buyers.  We are excited and ready to get the ball rolling.  If you are too click the link to start viewing homes for sale in Saint Augustine Florida

TEAM JOHNSON

Watson Realty Corp
3505 U.S. 1 South
St. Augustine, FL 32086
904-495-0146
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