Quick Market Update on Low Appraisals: On the Reynolds & Kline Appraisal end of things we are experiencing more and more low appraisals throughout the greater Western Washington/Puget Sound region.
I have talked with a number of other appraisers as well and the low appraisal issue is becoming fairly well know. I’ve been talking about this for a long time and we are at a point in the marketplace where it is finally happening. The super quick version is that appraisers don’t have the comparable sales data to support the super high sales contracts that are being put together this Spring of 2018.
Limited supply also means limited sales data. Appraisers have to use comparable sales to support their estimated values they can’t just “extrapolate” them from the marketplace. Actual sales have to exist to be able to support any given value. And right now, there is a gap between the pending sales prices and existing sales. For a more detailed explanation you can watch a video we shot in 2016 titled “Multiple Offers but Low Appraisal”. When we shot this video a couple of years ago we hadn’t seen many low appraisals but the framework was there for what we are now experiencing in 2018. A low appraisal can really rock the boat of both buyers, sellers, their respective real estate brokers, title, escrow, and mortgage.
A low appraisal can kill the deal. As the owner of both a real estate brokerage (Summit Properties NW, LLC) and a real estate appraisal company (Reynolds & Kline Appraisal, Inc.) I often get asked to take a look at offers being made to see if they will appraise. After years of looking at sales data, I can take a couple of minutes and tell you what your odds of a low appraisal will be. This is a service that all Summit Properties brokers have as part of their broker package at no charge. If you are with an outside brokerage give us a quick look: Check us out on Youtube! And then once you get a low appraisal you need to figure out a game plan, what are you going to do? Knowing what your options are from the appraisal end can be a critical factor. Feel free to reach out to me at firstname.lastname@example.org or email@example.com with your appraisal related questions. I look forward to hearing from you!