If you are in the process of selling your home, make sure you realize the major challenge a hot real estate market creates.
Each house must be sold twice; once to a buyer and a second time to an appraiser who represents the bank that will grant the purchaser a mortgage to buy the home (unless it is an “all cash” purchase). In a real market with escalating prices, the second sale may be the more difficult. And a recent survey by Quicken Loans reveals that the gap between what a homeowner believes is the value of their home compared to an appraiser is widening.
This could lead to an increase in the percentage of real estate transactions being challenged by a ‘short’ appraisal (where the appraiser value is less than the contracted price of the home).
Whether you are a buyer or a seller, you must be prepared for this possibility as it may result in a renegotiation of the price of the home.