The shortage of Fort Lauderdale homes for sale has yielded intense competition. If a homebuyer is lucky enough to reach the final stretch after having their offer accepted, while the seller is elated to have found a buyer, both parties are discovering more often of late that the appraisal is negatively impacting the deal.
Yes, the latest wrinkle in the recovering housing market is the appraisal. When multiple bids drive a house price higher above what the seller is asking, which is not unusual these days in Fort Lauderdale, appraisers seem reluctant to reflect the improvements in real estate values.
The National Association of Realtors recently polled its members and found 33% of salespeople experienced appraisal problems in May 2012. According to Moe Veissi, president of The National Association of Realtors, poor appraising in markets no longer in decline is the single most important valuation obstacle to seeing a real recovery in the housing market.
In a recent L.A. Times article, Low Appraisals that Don’t Reflect Rising Markets Are Ruining Deals, “Frank Gregoire, former chairman of the Florida Real Estate Appraisal Board and an appraiser in Saint Petersburg, said many appraisers are reluctant to make the upward adjustments they know to be justified by recent positive appreciation trends because they fear criticism that they are potentially overvaluing the property – exposing the lender clients to costly “buy-back” demands by Fannie Mae or Freddie Mac, or future litigation.”
In the same article, Gregoire went on to say that even when appraisers have data supporting a higher valuation, such as pending home sales and new similar homes listed for sale at higher prices, “they take the easy way out” and go with the lower valuation.
Don’t let your Fort Lauderdale home sale or purchase be jeopardized because of an appraisal. To help avoid low appraisals, both the buyer and the seller should make sure their Realtors assemble the correct data on comparable sales (comps) and pending sales that validate how the market has changed in the last six months or less. Also, the seller should provide dates and details of major home improvements. Then it is important to share all of that information with the appraiser.