Palm Springs Real Estate Podcast with Will Cook - What to Do If Your Appraisal Comes in Low in the Middle of a Transaction

What to Do If Your Appraisal Comes in Low in the Middle of a Transaction

11/22/16 • -1 min

Palm Springs Real Estate Podcast with Will Cook

If a home appraisal comes in lower than the sales price in the middle of a transaction, what should you do? Here are your three options.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Low appraisals can be a real challenge in our market today. Low appraisals have become more common because our home prices have been appreciating quickly over the past several years and there are fewer and fewer comparable properties. It seems that each sale is higher than the last.

So what is an appraisal? It’s a price that a willing buyer and seller will settle on. In reality, a home must be sold to three different groups: the buyer’s agents, the buyers themselves, and the mortgage lenders. The brokers help us find the buyers for your properties, the buyers have to feel that the sales price is justified, and the lenders have to agree on the value because they’re the ones putting up most of the money for the house.

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If a home appraisal comes in lower than the sales price in the middle of a transaction, what should you do? Here are your three options.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

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Previous Episode

Debunking 4 Major Real Estate Myths

There are four real estate myths that, unfortunately, too many people believe. Some of them could even cost you a lot of money.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

There are four major real estate myths that I wanted to debunk for you.

1. Realtors get kickbacks from lenders, home inspectors, and other referrals. This is not only untrue and unethical but according to the Real Estate Settlement Procedures Act (RESPA), it’s also against the law. No professional Realtor is going to jeopardize their career or reputation just for a kickback. Most agents, however, will give you recommendations for vendors like lenders or inspectors because they build professional relationships with these people and they know that they’re good at what they do. It only helps to ensure a smooth transaction for everyone involved.

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Realtors won’t jeopardize their career
just for a kickback.

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Next Episode

Market Update January 2017

What's going on in the Palm Springs market? I've pulled the numbers to give you a comprehensive look at how our market changed last year and where it's headed in 2017.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

What's been going on in the greater Palm Springs area real estate market?

With 6.3 months of sales, our market is balanced. This is part of a positive trend, though, as it is one month less than it was at this time last year. Remember, six months of sales (or absorption rate) is a balanced market. A higher number would favor buyers, and a lower number favors sellers.

If we look at the absorption rate by price range for all Coachella Valley area cities, we can see that the highest absorption rate is for properties listed over $1 million at 18.7. That means it would take 18.7 months to sell all homes listed at $1 million or above if no other home came onto the market. This is also a positive trend. At this time last year, the absorption rate in this price range was 20.9 months.

As you can imagine, the lower price points have a lower absorption rate because there are more buyers who qualify for those types of properties. Homes priced below $200,000 have the lowest absorption rate at 3.2 months of sales, which is also lower than last year when the rate was 3.9 month...