5 Main Reasons Your Appraisal Come In Low

If you are familiar with buying real estate in Tahoe Keys, you know how important a good appraisal is. If you are new to buying a Tahoe Keys home, well let’s just say if an appraisal comes back low, it can make for a stressful Tahoe Keys real estate scenario. After all, your bank will only fund a loan amount that matches the appraised value which means you either have to pay more money out of pocket or potentially walk away from the sale, find a new Tahoe Keys home for sale and start the whole process all over again. Don’t panic just yet though because there are some things you can do in this scenario.

One of the main reasons that an appraisal doesn’t come back at the number you want it to is because of comps, or comparable properties. Appraisers have to take into account comparable properties in the Tahoe Keys and what they sold for. If a comparable property sold dirt cheap (reasons can range from a bad divorce to major inspection issues) and the appraiser doesn’t dig deep enough, this can affect the appraisal on your home. In some scenarios, an appraiser has to choose comps from a different nearby neighborhood. This could simply be because there isn’t enough data on the homes closest to you. Regardless of the reason, these factors can skew the report, affecting you and your loan.

Another reason that the appraisal on a Tahoe Keys home for sale could come back short is because the features you love about the property aren’t features the appraiser loves. The Tahoe Keys is privy to a private beach, tennis courts, pool, club house and more, but let’s say that a one or two of these things was added to the Tahoe Keys home for sale. Now let’s say that the house down the street is almost identical and does not have these features. While one would think that the home with the private tennis court and in ground swimming pool would be worth more (after all, it cost a pretty penny to add these in!), that doesn’t always mean the difference in selling price is going to match the amount of money it took to add these features. Especially if these added features are above typical quality for the area. For example, let’s say a majority of your neighbors added tennis courts, and they all spent roughly the same amount. Just because you spent more than them, doesn’t mean you will get more.

If the first two don’t add up for you, another reason is that the market is just too busy and it is hard to keep up. In areas where prices are continually soaring, comps within the last year won’t reflect the change in higher prices. Simply put, the appraiser won’t have recorded comps to use.  You can always ask the appraiser to make a market adjustment, but at the end of the day, they don’t HAVE to do it.

Which brings us to our next one. Your appraiser could be hard to work with or inexperienced.  The lender is the one who chooses the appraiser so ask them how they select the companies they use. The last thing you want is someone who is doing a rush job, doesn’t know the market or is new to the job.

And finally, another main reason why the appraisal came in short is you chose to overpay. It happens. The market’s inventory gets low, a bidding war breaks out and you desperately want the home so you up the bid. In this scenario, be prepared to pay out of pocket. Likely, the appraiser is not going to give the house a higher value simply to appease you. Since you only get approved for the fair market value, know that if you over bid for a Tahoe Keys property for sale, the difference will likely be up to you.

For more information on buying a home for sale in the Tahoe Keys, call Peter Delilli at 530-308-4331.

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