Low Flying Martians and Real Estate
July 16th, 2009 categories: Pricing
What do low flying martians and real estate have in common?
Funny you should ask. Lets say you overprice your property and an unknowing buyer writes a purchase offer-in order to get it closed you have to pass inspections, lender requirements and the dreaded appraisal. If the property doesn’t appraise, the lender will not loan the money and the “deal” is usually dead in the water….unless you want to reduce the sale price.
For the sake of argument you live on Main Street in West Chester in a 4 bedroom, 2.5 bath, two story. Square footage is within 10%-15% of all your neighbors. The last 2 sales in the subdivision were closed 3 months ago in the range of $240,000- $250,000. The offer on your house is for $275,00. ( I truly doubt any buyer would offer that much-but for the sake of the story)
The appraiser may have a difficult time finding comparables to justify the loan amount on the mortgage.
Don’t blame the appraisers- because lenders are finally protecting their investments.
Which brings me back to the “martians” and real estate.
Many years ago I told clients in Beckett Ridge and I quote “unless a low flying martians with cash purchases your property- it would never appraise”. Lucky for them “low flying foreign cash buyers” purchased the house. We all a good laugh over it -but had they been normal buyers it would have been an appraisal nightmare.
Avoid appraisal problems from the get go and look at the same data that appraisers are utilizing. Questions about your area or subdivision, call or email.
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