Bye, 2020! There are certainly things we won’t miss about this past year. Looking back, however, one of the things we are thankful for is the real estate boom. In many parts of Florida and throughout the country, the real estate market has been hot!
That’s been due to record low mortgage rates, but inventory is lower than what is needed to keep up with demand. This means prices are moving up sharply, and many buyers are willing to offer more than the asking price.
This sounds like a great thing for sellers, but there’s a step that can be forgotten until it’s too late – *dun dun dun* - the appraisal.
Unless you’re paying in cash, the bank needs to ensure that they’re not giving too high of a loan for the property. Just because a buyer really wants to buy it for $15,000 more than asking doesn't mean the bank does.
Ways to Avoid a Low Appraisal
1. Don’t Be Zillowed - Price the home correctly. Avoid the urge to overprice because of the market. Find a comfortable price that has some room for negotiation - up or down.
2. Consider Upgrades – According to a local appraiser, the usual upgrades are always great ways to increase your appraisal value:
- Upgraded Kitchens
- Renovated Bathrooms
- New Windows
3. Prepare the Home for Occupancy – A home that’s ready to live in will likely earn a higher appraisal. Touch up walls and base boards with paint, pressure wash the exterior of the home and driveway, declutter every room, mow the lawn, and finish any incomplete projects.
“I Did All That, but My Appraisal Was Still Low! What Now?!”
Receiving a low appraisal can be stressful for the seller and buyer. The buyer thinks they are going to get a better deal, but they might actually lose the deal by staying with the original appraisal. The seller is not happy since they believe their property is worth more. So, how do you save the sale?
- Negotiate a Lower Sales Price
- Dispute the Appraisal with the Original Lender
- Request a New Appraisal from a New Lender
Our final piece of advice when dealing with an appraisal is to relax and let the system work. It’s in place to make sure everyone has a safe transaction.
For any additional questions about appraisals and staging, please call any of our offices to speak to our team.
