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Low Appraisal Values in Up Markets Lead to Contract Cancellations
Low Appraisal Values in Up Markets Lead to Contract Cancellations

 
Monday, June 03, 2013
Tags:   fort lauderdale condos
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The Fort Lauderdale real estate market has witnessed incredible growth the past two years. Distressed properties are experiencing multiple offers leading to bidding wars, and homes and condominium selling prices are increasing monthly as a result of the decline in distressed properties and the continued demand from buyers. In fact, the pace of growth in the market is making the job of the appraiser more difficult, since the data appraisers use is not at pace with the market. Appraisers in up markets who have poor knowledge of local conditions or those who do not have accurate data mechanisms to keep up with the market, put many contracts in jeopardy, and force cancelations. Last year the National Association of Realtors reported 35% of realtors reported contract problems relating to low appraisals. In Fort Lauderdale, 11% of contracts are not coming to fruition, due to issues relating to appraisals.

According to the National Association of Realtors Confidence Index, which polls nearly 3,000 members of NAR monthly, “65 percent of Realtors® surveyed in September report no contract problems relating to home appraisals over the past three months, 11 percent said a contract was cancelled because an appraised value came in below the price negotiated between the buyer and seller, 9 percent reported a contract was delayed, and 15 percent said a contract was renegotiated to a lower sales price as a result of a low valuation.” In Fort Lauderdale, home prices have consistently risen at a fast pace due to demand and constricted inventory. These conditions give rise to appraisers issuing appraisals that do not reflect the current market, which may lead to an impasse between buyers and sellers. In some cases, contract cancellations occur unless the parties come to an agreement. Properties priced accurately are least likely to encounter these problems, making the advice of a reputable realtor, with expert neighborhood and condominium market knowledge, essential to selling your home. If you are looking to sell your waterfront home or condominium, please contact me today.

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