Interest rates are at a record-low for homes for sale in Encinitas, but low appraisals on those homes for sale in Encinitas can make it difficult at best for potential home purchasers and borrowers to take advantage of the ability to refinance their home or sell their home to relocate.
The Wall Street Journal reports the story of a Phoenix couple, Samara and David Glassman, having their home, purchased in 2008 at $604,000, being appraised at $385,000 based on homes not comparable to theirs in their neighborhood. When they sought out a second appraisal it valued the property at $500,000, which was a high enough figure to allow them to refinance into a new mortgage that will save them over $250,000 over the course of the loan.
One-third of Encinitas real estate agents, such as myself, and other Realtors around the nation have reported that low-appraisals have resulted in the delay, renegotiation, or even cancellation of a purchase as reported by the National Association of Realtors.
Lenders are reporting that overly pessimistic appraisals, caused by appraisers using nearby distressed sales as their “comparable” constant, have resulted in many deals falling through.
So what should you do about this trend? Here are some tips you can follow to help you make sure that your Encinitas real estate is valued properly:
- Look at comparable sales for the last 3 to 6 months before seeking a mortgage.
- Share with the appraiser the information you have found on comparable sales (preferably with documentation of your research).
- Point out to the appraiser any and all improvements you have made to the home, a perfectly acceptable practice according to the Appraisal Institute.
- Request that the lender review the findings of the appraisal.
- Look for factual errors to justify a reappraisal (wrong square footage or number of bedrooms for example).
- Resubmit you loan application to a different lender to receive a new appraisal.
- Attempt to overturn the appraisal by providing recent comparable sales not considered by the appraiser or ask the lender for a second appraisal keeping in mind that you may have to pay for it.
It is dependent on the lender whether or not you will receive a free second or even third appraisal upon request or if you will have to jump through numerous hoops to even be able to pay them for a new appraisal.
Finding the right lender and getting a proper appraisal can be a difficult process. The easiest solution is to have an Encinitas Realtor guide you through the process personally so that you can ensure that everything is being done properly to appraise your home correctly. Contact me, Encinitas Realtor Linda Moore, today for additional assistance.