The mere mention of the home appraisal can strike fear in the heart of home buyers and sellers alike. As a seller, you can do everything right - get your home prepared to sell, select a qualified buyer with a great offer, dot your i's and cross your t's, only to find that the bank appraisal comes up short of what you believe your home is worth. If an appraisal comes in below the offer, a buyer could walk away from the deal, not wanting to pay a high price for a home that may not be able to sell for that at a later date.
But as with most things, there's more to it than that.
How appraisers value a home is only as accurate as the data they have to support their decision. Meaning, it is a quantitative process and they have to base their valuation on information that by nature is 'old.' Hot housing markets like Arlington or Medford that have seen a rapid increase in home values over the past few years can make it difficult for appraisers to get the most up-to-date information. Comparables are also part of the appraisal process, so when inventory is low (like it is now), and there are no similar properties to compare values, it only compounds the issue.
Buyers on the other hand, operate on a more subjective basis - they might love the style of the house, the location, the school district... It can be difficult for a buyer who has fallen in love with a home to hear that the bank does not hold it in the same regard. In today's real estate, value is not necessarily based on comparables or what your neighbor sold their home for, but rather what the buyer is willing to pay because of their individual situation and the personal value they place on the home.
At the end of the day, an appraisal in real estate comes down to the economics of supply and demand. As a buyer, it is important to understand what matters to you and what are you will to pay (or not) to get it. As a seller, the only way to know the true market value of your home is to sell it. And when you buy or sell your home with the #1 team in Arlington you can be confident you're getting the best input and direction based on the latest market conditions.
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