You Will Have To Sell Your Home Twice

Dated: 07/12/2017

Views: 62

 

Homeowners: Your Home Must Be Sold TWICE

Homeowners: Your Home Must Be Sold TWICE | MyKCM

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth, as compared to an appraiser’s evaluation of that same home.

Bill Banfield, VP of Capital Markets at Quicken Loans urges anyone looking to buy or sell in today’s market to remember the impact of this challenge: 

“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage.

A homeowner [or a buyer] could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected. On the other hand, if an appraisal comes in higher, they could be surprised with more equity than they had planned. Either way, if owners are aware of their local markets it will lead to smoother mortgage transactions.”

The chart below illustrates the changes in home price estimates over the last 12 months.

Homeowners: Your Home Must Be Sold TWICE | MyKCM

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacle that may arise.


Blog author image

Danny Crow

As a real estate agent since 2000, I enjoy helping others discover Central Texas and make a home here. Real estate in Austin offers many options to home buyers and I will make sure you explore every o....

Want to Advertise on this Site?

Latest Blog Posts

Is It Time To Call A Plumber Be Aware Of These Signs By Virn Del Valle

Poor plumbing conditions in your home can escalate to bigger problems such as flooding and accidents. On top of that, you'll most likely find your monthly water bills with exceeding charges.Avoid

Read More

Why You Need To Update Your Home Before Listing It

By Anica OaksA home purchase is often the biggest investment a person will make in their life. When the time comes to sell your house, you want to get the best price possible. If you explore one

Read More

How To Get The Best Price When Selling Your Home By Meghan Belnap

If you're selling your home, you're likely trying to make as much of a profit as possible. Unfortunately, most markets are crowded and it can be difficult to stand out. If you want to get a good

Read More