Our local real estate market started our brisk in the Prince William County Virginia area in 2015.
Actually from where Patty and I were standing, there was no Christmas Holiday Season. Homeowners were listing and selling homes and buyers were out in droves.It was off to the races right after New Yeas and it hasn't let up this year so far.
2015 so far has been an extremely busy year for Northern Virginia and Prince William County Virginia REALTORS.
However in April 2015 we saw a little shift in the winds. As prices of homes have begun to increase and multiple offers started coming in and sellers were getting their prices or very close to it.Then the other shoe dropped.
Or should I say the Appraisal Time Bomb Dropped!
I recently had an appraisal come in $18,500 low!
Another home a condo came in $7,750 low!
As a listing agent in the Lake Ridge, Woodbridge area for the past twenty plus years, this has never happened. A few thousand yes, it could happen. But $18,500?
As you can imagine I went to bat for my client the seller. I pushed for a review of the FHA Appraisal.
Just shy of a week later, we get a response from the appraiser along with a supplemental addendum stating
I’ve attached the appraisal rebuttal I received.
He is not changing the value of $491,500.
Sr. Loan Officer/Processor
So the sellers had a choice to make. Cancel the contract and stay where they were? Then everyone looses. Buyers loose out, sellers loose out, lenders, title companies, REALTOR's, everyone winds up working for nothing.
The FHA Appraisals live with the street address for six months. So getting another appraisal was not an option. Selling to someone with more that twenty percent down or cash is a tall order. Not many people in today's economy have the additional funds to pull that off.
So both sellers ultimately decided to move on with their lives. Both were incredibly lucky that they had enough equity to be able to do that.
So this brings me to another point. Don't expect a lot of sellers are going to be so quick to help with closing costs for a home buyer. A smart seller will hold tight and negotiate the best terms for them just in case the appraisal comes in low and they need to leave some well earned equity on the table.
Homeowners- before you decide to do any major updates in your home. It might be best to consult a local REALTOR to see if you will be over improving. That could prove to be a costly mistake down the road. As long as your updates are for your enjoyment and benefit and you can live with the costs. You will be fine.
So I bet you want to know why are appraisals coming in low all of a sudden? Well, as of January 26th, Fannie Mae and Freddie Mac are using what they call Collateral Underwriting. This is a risk program that allows they to review up to twenty additional comps to bring the risk down for the bank! Yes you read that correctly. So,just as homeowners in Prince William County Virginia ( as well as across America) are recovering some of the lost equity from melt down in the housing industry ten years ago, the Appraisal Time Bomb has Dropped. For anyone who cares to learn more about this.
Listen to Frank and Brian over at the National Real Estate Post. I bookmarked this video back in January just in case we started seeing the issues first hand. So glad I did.
" It is at times like this I want to have a glass of wine. Who wants to join me?"
As a listing agent. I pride myself on getting homeowners the highest price the market will bare, in the least amount of time with the least amount of stress. This little situation is not one of the items I can control.'
Today....I am frustrated for sellers and potential sellers. My knee jerk reaction is how can you go forward if you are always looking backwards?
So with this knowledge when I meet with you I will be reviewing all the comparable homes with you.
You the seller ultimately set the price of your home. We just have to weigh the pro's and con's. Figure out what will work for you and how I can get you to the closing table to help you move forward to your next destination.
I have heard of a lot of real estate transaction falling apart at last minute. I belong to a few REALTOR feeds and agents across the board are sharing stories about low appraisals are forcing contracts to fall apart. Local loan officers are working double time trying to stay on top of things. So far we have been able to help and guide our clients to a successful settlement. Patty and I work very hard juggling all the task to be done from listing to contract to settlement and negotiating every obstacle.
"We look at every obstable as challenge . Well more like a Speed Bump, than a Road Block. There is a difference! So when results matter count on The Twins Selling Real Estate to help you with your real estate transaction."