Home Appraisals (Cary, Wake Forest, Welcome: comparable sales, sales, real estate)
Raleigh, Durham, Chapel Hill, CaryThe Triangle Area
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Those of you buying/selling homes in the triangle right now...curious how your appraisals have gone.
We went under contract in just a couple days for wayyyyyyyy more than we ever dreamed we would be getting. Curious how many issues people are having with homes appraising below the contract price. I honestly have no idea what the heck the appraisal process even looks like in the present market. Wheel of fortune setup? Darts at a dartboard? Our realtor was pretty clear that choosing a listing price is a lot more of a shot-in-the-dark guesswork than it was even a month or two ago. Can't imagine appraisals are an exact science right now either (not that they were before)...
Those of you buying/selling homes in the triangle right now...curious how your appraisals have gone.
We went under contract in just a couple days for wayyyyyyyy more than we ever dreamed we would be getting. Curious how many issues people are having with homes appraising below the contract price. I honestly have no idea what the heck the appraisal process even looks like in the present market. Wheel of fortune setup? Darts at a dartboard? Our realtor was pretty clear that choosing a listing price is a lot more of a shot-in-the-dark guesswork than it was even a month or two ago. Can't imagine appraisals are an exact science right now either (not that they were before)...
The short answer; don't plan on the house appraising at contract price in this market.
I sincerely hope your listing agent confirmed with the buyer's lender that they had funds to make up a gap in appraisal and with the buyer that they are willing to do so.
I just had to have *that* conversation with yet another client after her 3rd offer was rejected that basically in this market a buyer has to budget for a gap in an appraisal. If a buyer/their agent feels like there's a good chance the property will appraise for their offer price...said offer probably won't get accepted
They were the ones who warned us (not that it wasn't already on my mind) so assume they asked. This offer came in well ahead of others and with some other advantages so even if we have to meet in the middle somewhere I suspect it was still our best option. With the due diligence they put down they probably won't walk away too easily if it doesn't appraise but we'll see what happens if it comes to that. Our realtor was confident it would appraise for at least where the other offers came in.
I don't envy those of you in the real estate business right now, especially those working on the buyer side. We had to leave town to accommodate ~30 folks coming through over 3 days and we're in a "slow" part of the triangle. Everyone I have spoken to said they are writing 2-3x as many offers as they used to and many are still getting outbid.
We just refinanced and the underwriter wanted an appraisal at the last minute. Our house came in way above what the county assessed it in 2019 SHHHH, lol.
Anyway, we are in Northern Wake County outside of Wake Forest. The area is booming in terms of new development and construction. They are building a new development right next to us where the starting home price is in the high 500s, I know gasp.
The home prices are going way up, especially in desirable areas. But mind you this is all over the country.
Those of you buying/selling homes in the triangle right now...curious how your appraisals have gone.
We went under contract in just a couple days for wayyyyyyyy more than we ever dreamed we would be getting. Curious how many issues people are having with homes appraising below the contract price. I honestly have no idea what the heck the appraisal process even looks like in the present market. Wheel of fortune setup? Darts at a dartboard? Our realtor was pretty clear that choosing a listing price is a lot more of a shot-in-the-dark guesswork than it was even a month or two ago. Can't imagine appraisals are an exact science right now either (not that they were before)...
the "appraisal process" hasn't changed. They have a standard form(at) they use to arrive at the current market value that can be justified to the lender.
Given the speed of the market, they may be contacting similar under contract listings to glean info from the listing agents, be that price or even # of offers. "Normally", there are sufficient comparable CLOSED sales for them to use those.
If you asked beyond what anything else has sold for, and then sold for significantly (5%+) more than that, then everyone in the transaction should already be assuming the appraisal will be low ... because it should. There's not enough comparable sales to justify the price a "willing buyer" provided that satisfied a "willing seller".
I've had several appraisals done in the last 10 months for refinance opportunities and they all have come in low. I live in a very desirable area of west Cary where houses sell in a day (or before listing) at 5% over list price. In each case the appraiser pulled a couple of comps from local tract neighborhoods which brought the value down while skipping homes from the same semi-custom builder in the same neighborhood one street over. We will see what happens to our neighbor's house that went under contract with 12 offers the first weekend in the 950k+ range.
I've had several appraisals done in the last 10 months for refinance opportunities and they all have come in low. I live in a very desirable area of west Cary where houses sell in a day (or before listing) at 5% over list price. In each case the appraiser pulled a couple of comps from local tract neighborhoods which brought the value down while skipping homes from the same semi-custom builder in the same neighborhood one street over. We will see what happens to our neighbor's house that went under contract with 12 offers the first weekend in the 950k+ range.
Sounds like you had an appraiser that didn't understand the neighborhood.
Last year, I had a home that sold for (ONLY) $4,000 over list price. I wasn't even concerned about it not appraising. However the appraiser we got somehow missed the house 2 doors down that sold for more than it was listed at and instead used a comp that wasn't even a comp! We did NOT appraise. Back then, buyers and sellers were agreeing to the "meet in the middle".
Fast forward a few months. I had a home that sold for $20,000 over list price. Again, I had that "what happens when the home doesn't appraise" conversation with my clients. I even went so far as to call the appraiser to discuss where I got my comps and to explain the neighborhood. Appraiser laughed at me and said he used to appraise the neighborhood back in the '90s when it was being built so he absolutely understood the neighborhood! We appraised. $20,000 over list price!
Fast forward to today. We get multiple offers on home. Buyers are paying $10,000 to $30,000 and above for due diligence. Buyers are signing addendums in which they agree to pay the price they offered and if it doesn't appraise, BUYERS make up the difference. Buyers are agreeing to buy the house "as is".
Welcome to my world!!!
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