Why scapegoat the appraisal

By Guest Contributor Carlos Lobato, Sales Associate, Coldwell Banker Miami Lakes office

Appraisals are killing real estate deals. This should come as a surprise to no one. As a matter of fact, the appraisal has come up short on my last four transactions. It's quite common for appraisals to come in at $25,000 or more below contact prices. Just this week I had a property appraise at $140,000 below the contract price! Needless to say, all parties are shocked. Yes, the listing agent, the seller, the buyer, and I expected that we would come up short and would have to renegotiate, however, this is more than 100% off from any of our wildest estimates.

For now, we're in limbo. The buyer still wants it, the seller still wants to sell it, yet the buyer can only buy it for the amount that their lender will lend. So you ask “What can we do - blast those appraisals?" I think our industry is barking up the wrong tree. The appraisals are merely a reflection of what properties are currently selling for, and the buyers by and large will pay the appraisal value. Unfortunately, we're just not adequately educating the home sellers. It's a bitter pill to swallow for a homeowner, but a reality nonetheless. Let’s start off on the right foot by having the homeowner order an appraisal before listing their property.