Gap Widens Between Homeowner Estimate of Home Value and Appraised Value
In many cities across the United States, Homeowners think their home values have recovered more than appraisers do. Who’s right?
Licensed appraisers must support their opinion of value, based on the features in your home and recent sales of similar houses in the same market area. But appraisers are now also tested against other appraised value in a data base the government has created. If an appraisers’ opinion of the value of a home is significantly different from a prior appraisal, the appraiser must defend his opinion in order to keep his license. Based on that motivating factor, appraisers may be overly conservative in their valuations, but it is also beginning to be evident that home values are not increasing as quickly as realtors would have you believe. According to Quicken Loans, Appraised values show a 3.30% increase over the previous year. According to the National Association of Realtors, average existing single family home prices have increased 4.9% since 2016.
Appraised value will determine the amount of the funds for the purchase. Whether you are trying to sell your home or buy a new home, the appraiser’s opinion of value will affect the amount of funds that can be borrowed to purchase the home. That means, unless the transaction is a cash deal, the appraised value matters.
Selling to avoid foreclosure: In order to attempt to sell your home to satisfy your mortgage obligation, you may need your lender’s approval of a short sale, based on your home’s current appraised value. Lenders may actually be more willing to consider other foreclosure loan work outs as a way for you to keep your home in a foreclosure situation, when the home value is not more than the outstanding balance due. Check with your lender or attorney to find out the real value of your home and make your decisions from there. Want Help? Contact us below
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