Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
I received this June newsletter from the Lohr team at Long and Foster. There are some stories about what's going on locally with appraisals, short sales, and home sales trends.
We bought our house just before these new appraisal rules came out. I have a strong feeling that our appraisal would not have come in at precisely our purchase price if the new rules had already taken effect.But I say, appraisals were always baloney, and if you are aware of the data available on the internet, you do not need an appraiser. Now they are just baloney weighted in a slightly different direction than before.The other interesting item for me was the graph about PWC foreclosures, which are rising again. CRT, will you be keeping an eye on that, too?
Yeah, PWC trustee sales going up was really surprising to me. I really didn't think there were very many weak hands left in PWC. But it didn't go up that much, not enough to make up for 4 slow weeks yet. That was a very informative letter, Harriet. I liked especially the breakdown by price point in number of closings. Spring came late to the 400-800k market and it's starting to tail off sooner. We're thinking of putting in an offer after I get back from a conference next week. Appraisals are definitely going to be a concern, because this complex has so few recent sales, who knows what they are going to use. But we'll worry about that if the time comes. The concept that they would accept the highest bid my husband is willing to offer seems a stretch anyway. Which is ironic, since I could easily see the appraisal coming in 10k beneath that (or 15k over it). We shall see, maybe someone else will get a contract on it this week and we won't have to worry about it. Why this would be the magic week since it's been on the market since March is another question.
We just had some friends lose a house because theirs didn't sell due to appraisal rules. The two were 20k off and they just can't come down that far in price. It was pretty heartbreaking for them.
Staying Put,Yeah, you notice that the Lohr group reported that the 4 out of 5 that did close after a low appraisal had both the seller reducing the price AND the buyer bringing more cash to the table.I was trying to calculate how much of the difference we could make up if push came to shove in my absurdly hypothetical situation. The minimum is the difference between 23% of your original contract price and 23% of the new appraisal (for us who are planning on putting down 20% and 3% closing costs). Which means that a buyer who is putting down 20% and covering their own closing can at a minimum bridge 23% of the gap between the appraisal and the contract without bringing any more money to the table. But 1/4 of the way there isn't a lot of solace to the seller. Especially if they already felt the contract price was low.
Its funny to me that realtors and sellers are trying to blame appraisal rules for the uncompleted sales and not the fact that appraisals are finally coming in line with actual value and not bubble wishing prices. We need these realistic appraisals to keep the stupid people among the buyers from putting themselves underwater within a year and going into foreclosure.
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