If you’re trying to decide whether or not to sell your house, this is the time to think seriously about making a move. Fannie Mae’s recent Home Purchase Sentiment Index (HPSI) reveals the number of respondents who say it’s a good time to sell is higher now than it was over the past few summers (see graph below). Today, the majority of consumers, 75 percent, say it’s a good time to sell a house.
The higher good time to sell sentiment has to do with today’s market conditions, specifically low housing supply and high buyer demand. In the simplest terms, we don’t have enough houses available for sale to meet buyer demand.
But while housing supply is undeniably low, the right side of the graph shows how the inventory situation is improving little by little each month as more sellers list their homes for sale, so now IS the time.
Why does an appraisal gap happen?
With the heightened buyer demand, purchasers are often willing to pay over asking to secure the home of their dreams. If you’ve ever toured a house you’ve fallen in love with, you understand. Once you start to picture yourself and your furniture in the rooms, you want to do everything you can to land the property, including putting in a high offer to try to beat out other would-be buyers.
Home prices are appreciating at near-historic rates, and that’s creating some challenges when it comes to home appraisals.
When the appraiser comes in, they look at things a bit more objectively. Their job is to assess the inherent value of the home, so they’re going to study the facts. Dustin Harris, Appraiser Coach, drives this point home: “It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market, regardless of what decisions have been made on the price side of things.”
While homebuyers may be willing to pay more, appraisers are there to assess the market value of the home. Their goal is to make sure the lender isn’t loaning more money than the home is worth. It’s objective, rather than emotional. In a highly competitive market like today’s, having a discrepancy between the two numbers isn’t unusual. Here’s a look at the increasing rate of appraisal gaps, according to data from CoreLogic (see graph below):
The best thing you can do is understand appraisal gaps may impact your transaction if you’re buying or selling. If you do encounter an appraisal below your contract price, lean on ME to help you understand your options and handle any additional negotiations that need to happen.
On a personal note, September is ACTION PACKED for my family. We are back to school and in the thick of fall sports which I LOVE! Both Jack and Kelly have birthdays in September and Pat and I celebrate 19 years of marriage on September 7th.
You know me well and you know I put priority on spending time with my family with every opportunity BUT I’m never too busy for your referrals. This year has been a wonderful year of referrals and I’m honored.
I appreciate you – Keep ’em coming!
Happy Fall (soon) 🙂