EL Segundo, CA (PRWEB) October 16, 2012
It’s not enough good news that mortgage rates have lowered, as the U.S. housing market finds a foothold in this economy. Taking away what interest rates make more affordable, a low home appraisal can prevent the sale of a home, leaving buyer, seller and house in a bind.
Go Banking Rates’ new article explains how home appraisals work, and provides some tips for disputing a lower-than-expected appraisal so sellers and homeowners planning to refinance can get the best deal before mortgage rates begin rising again.
Why Home Appraisals Can be Too Low
A home’s value can be determined by a number of factors: Everything from the age of the house to neighborhood crime rates can determine a community’s popularity on the resale market.
Appraisals also vary depending on the appraiser. One real estate broker explains how it’s done: “I make adjustments for every minor detail that would make it different than the others,” says Karyn Anjali Glubis, a realtor in Tampa, Fla. “Adjustments are made for location, age, extra bedrooms, fewer closets, newer bathroom fixtures etc., as I want my initial pricing to come across as accurate. A homeowner seldom undervalues their property; however, with these details, I am able to price the home based on market value and demand.”
But even with all these factors in place, if a seller is asking $350,000, and the potential buyer’s bid is $280,000, but the lender chimes in with an estimated home value of only $250,000, that’s money lost, or worse, a deal blown.
How to Avoid a Low Ball Appraisal
Beverly Hills-based mortgage broker Gloria Shulman told Go Banking Rates that changing an appraiser’s mind can be difficult because many are swamped with other appraisals. Plus, big banks who hire appraisers prefer low-ball estimates because of a reduced risk that may come with first-time mortgages or refinanced deals.
However, there are some things consumers can do to challenge a low appraisal:
· Time the loan. Shulman explained to Go Banking Rates, timing a loan like a sale is helpful when getting a property appraised. Looking at neighborhood trends, she said; by paying attention to “For Sale” signs and listings, allows consumers to gauge the best opportunities to “sell high and refinance low,” and accordingly, when to get their homes appraised.
· Avoid panicking. Just like good timing, homeowners should avoid into refinancing if it’s unnecessary. Shulman told Go Banking Rates it’s best to plan three to six months out before getting an official appraisal.
· Research. It’s important to research local open houses and look at the number of foreclosures, what other, comparable properties are selling for, and visit the local tax appraiser’s office to review recent local home transactions. The ability for a home owner to pass on some hard numbers to an appraiser unfamiliar with the neighborhood can improve chances of getting a better estimate.