Tami Savage, Realtor

Your Key to a New Lifestyle

  • Search for Homes
  • Blog
  • About
  • Contact
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube

What To Expect as Appraisal Gaps Grow

June 29, 2021 By Tami Savage

What To Expect as Appraisal Gaps Grow

In today’s real estate market, low inventory and high demand are driving up home prices. As many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors (NAR). Shawn Telford, Chief Appraiser at CoreLogic, elaborates:

“The frequency of buyers being willing to pay more than the market data supports is increasing.”

While this is great news for today’s sellers, it can be tricky to navigate if the price of your contract doesn’t match up with the appraisal for the house. It’s called an appraisal gap, and it’s happening more in today’s market than the norm.

According to recent data from CoreLogic, 19% of homes had their appraised value come in below the contract price in April of this year. That’s more than double the percentage in each of the two previous Aprils.

The chart below uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a house sale in May of this year compared to May of last year.

How Appraisal Issues Impact Sales. Source: NAR Realtor Confidence Index

If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the house.

In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.

Bottom Line

Whether you’re buying or selling, let’s connect so you have an ally throughout the process to help you navigate the unexpected, including appraisal gaps.

Tagged With: Buying Myths, Down Payments, For Buyers, For Sellers, Move-Up Buyers, Pricing, Selling Myths

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Free eGuide. Things to Consider When Buying a Home. Send me this eGuide.

Free eGuide. Things to Consider When Selling Your House. Send me this eGuide.

A Guide to Buying Your First Home. Send me this eGuide.

Tags

Baby Boomers Buying Myths Community Demographics Distressed Properties Down Payments First Time Home Buyers Forbearances For Buyers Foreclosures For Sale By Owners For Sellers FSBOs Garden Generation X Generation Z Gen X Gen Z Holidays Home Home Trends Housing Market Updates Infographics Interest Rates Interview Investors Lifestyle Luxury Market Millennials Move-Up Buyers moving New Construction Pricing relocation Remodel Rent vs Buy Report Reviews Selling Myths Senior Market Short Sales SOLD Tax Refund Veterans Video

About Me

I help homeowners sell their existing home and shift into a home more suitable to their needs in the North Metro Atlanta area (specifically around Cumming, Canton, & Milton). Read More…

Let’s Connect

770-744-2524‬ or
(888) 959-9461 x2543

Digitial Business Card

 

  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube

Calculate Mortgage Payments

Below is a mortgage calculator you may use to help give you an estimate on your monthly payment and other details.

Once calculated, next to the monthly payment on the far right is a small graphic you can click on to see the payment schedule.

Calculate Mortgage Payments

www.mlcalc.com
Copyright © 2019+ Tami Savage LLC. All Rights Reserved. Privacy Policy

DISCLAIMER: The information contained, and the opinions expressed, on this site are NOT intended to be construed as legal or financial advice. Tami Savage does NOT guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as legal or financial advice. You should ALWAYS conduct your own research and due diligence and obtain professional advice before making any legal or financial decisions. Tami Savage will NOT be liable for any loss or damage caused by your reliance on the information or opinions contained herein.