Barrington property appraisals are carried out when buyers want to buy a home and finance it with a mortgage. Because we had a significant market tumble in recent years, cash buyers are also opting to have an appraisal to make sure they are not overpaying for homes. The buyer pays for the appraisal. The appraisal is received for less than the amount on your purchase contract.
This might be surprising to some when you listen to the media. They continuously state that property values are increasing, the market is buoyant, home sales are rocking and rolling. We like to remind both buyers and sellers that general terms like those spouted by the media are too general. Every real estate market is different. The area you are buying in may not have recovered as well as others. Home values may not yet be increasing, they may be declining. Different types and prices of homes are affected differently. For example luxury homes may not be selling well.
What about a market decline? Are we heading for another round of short sales? Some areas of the country are already talking about this, but their values did increase and some quite drastically. Here in Barrington we have a more level playing field.
Low Barrington Property Appraisals – What Can Buyers Do?
Your Realtor gave you good advice on the price the property you want to buy should be worth. Your Realtor provided property information available and comparable sales. The appraisal comes in at less than your contract price. It is important to know that every Realtor and every appraiser is likely to give a different value, especially in Barrington where our homes are not the typical cookie cutter same model name homes. There’s a fair amount of subjectivity. If you had 2, 3 or 4 appraisals carried out, it’s most likely there will be some variation in value amount.
I like to also point out that the information available may be incorrect. In a recent appraisal a home measured about 500 square feet less than was advertised and less than the tax records stated. The appraiser measured the house and the inconsistency was seen.
What Can You Do?
As a cash buyer you can choose to renegotiate the price or move forward at the price you originally agreed to pay. It does not affect a loan. The choice is yours.
As a buyer that needs a loan you can still agree to pay the original higher contract price, but you’ll have to find the extra cash. Your mortgage company will work off the appraisal when underwriting your loan. Most buyers choose to renegotiate the contract price. You’ll need to prove to the seller that the appraisal is low by providing them with a copy. The goal is to let the seller see that the number is less. Buyers want a lower agreed sales price, and move forward with the loan to commitment. Buyers want close on the home for what the appraiser said it was worth. I really cannot see why a buyer would want anything other than that!
If a seller will not agree to the lower price and buyers don’t want to pay the difference, the contract will be canceled and they need to find a new home to buy.
What About a Sellers Perspective?
Read low Barrington property appraisals from the seller’s perspective.
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