Why did my house appraisal come in lower than contract price?
Even with comparable sales to your contract price on your house on record, if there are other homes in the area that have sold for less since then, that says to an appraiser that values are dropping in the neighborhood.
An appraiser’s responsibility is to the buyer’s bank, to show to the bank that if they had to foreclose, the value would be there to resell it.
If he or she interprets the market to be declining, it is his or her obligation to report it that way.
If there is a long time between the contract date and the settlement date, it can make this issue more prevalent, so be aware of settlement dates more than 60 days out. Appraisers right now are looking at data generally less than four months old. If your house goes under contract, and settlement isn’t due to happen for 90-120 days, then you really don’t know what the market will tell the appraiser, and you run even more of a risk.
What can you do to prepare for an appraisal?
If you have done a lot of work to your house that is outstanding and sets your home apart from others, make sure to have those receipts, so your agent can make copies of them to give to the appraiser.
Make sure your house looks good when the appraiser is due to come through. Appraisers do understand that you are moving, so some boxes are expected, but a nice, clean house helps!
Be sure to keep up on what is happening in your neighborhood even after you go under contract. Those list prices and sales WILL affect your value!
Having a professional real estate agent to guide you through this tough market is very important. Contact me for Towson real estate needs!