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Home Appraisal Issues

National Association of Realtors recently conducted a survey in which it was revealed that a whopping 11% of all home sale transactions were cancelled due to appraisal issues! Well… it’s not surprising considering that home values are appreciating across most markets especially in Pasadena.  Over the last year, average price of homes sold is up 9.8% from last year.

September 2011 – average sold price in Pasadena  homes was $552,000

September 2012 – average sold price of Pasadena homes was $604,000

The inventory of Pasadena homes available for sale dropped by 40.4% for the same time period.

# of Pasadena houses for sale in September 2011 was 512

# of Pasadena houses for sale in September 2012 was 305

appraiser conducting an appraisalGiven the volume of available homes to purchase by Pasadena home buyers being so low and interest rates at historic lows, it’s not surprising that prices are moving up.  This, of course, creates a situation that we saw previously where the appraisers are not able to keep up with the appreciation since the data that they’re using is several months old.  Remember, it takes 30 to 45 days to go from acceptance of offer to recording of title on a home purchase.  We also need to build in some preliminary negotiation time.

Appraisal came in low – what are my options?

There are several things that can be done.

Home Seller:

A good selling realtor® will prepare a package with comparative sales to provide to the lender and will request the appraisal to be reviewed.  Phone calls should be made to real estate agents that currently have similar homes in the neighborhood in escrow to see what price they sold at.  Most recent comparable and local real estate information can help in getting the appraisal reviewed and adjusted.

READ MORE:  Seller Tips

Home Buyer:

A good buyers real estate agent will try to renegotiate the price to the lower, appraised value.  National Association of Realtors found that 15% of these contracts were successfully renegotiated.  A huge win for the homebuyers!

READ MORE:  Buyer Tips

Both Home Buyer and Home Seller:

Either way, the likelihood of the home sale escrow being delayed is pretty high.  NAR found 9% of these transactions were delayed due to the appraisal issues.

Thinking of selling your Pasadena area home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Pasadena Real Estate Market.

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