How to Deal With Appraisal Issues in an Appreciating Phoenix Market

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We’re currently in a strong seller’s market, which means we have an appreciating market happening. The number one challenge we’re experiencing for seller’s clients during this period is receiving appraisals lower than the agreed-upon purchase price. When this happens, we have three tips advising them on how to deal with it:

1. Consider taking less of an offer if the offer is cash. In a seller’s market, it’s not uncommon to receive multiple offers. If any of those offers involve cash, consider taking it even if it’s less. Since appraisals are loan-based, cash negates the need for even having them.
2. Remove the appraisal contingency out of the offer. Although our contract states that the home must appraise for at least the purchase price, you can remove the appraisal contingency. Therefore in the event that the property doesn’t appraise, the buyer makes up the difference between the purchase price and the appraisal price in cash.
3. Know that you do not have to cancel the contract if the home does not appraise. This is very important. If you haven’t done the first two, you can go back and negotiate with the buyer.
   “
   

   If your home doesn’t appraise, you
   can always go back and negotiate
   with the buyer.

   ”

As always, if you have any further questions feel free to reach out to us by calling or sending an email.

Now is the Time to Sell Your Phoenix Home

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Should I sell now, or wait a little bit longer?

That’s the most frequently asked question we’re getting from our seller clients in today’s market. It’s a common thing to hear in an appreciating market - a seller naturally wants to get as much as they can when they can for their home.

Before answering this, we tell them first that you have to know if you’re going to be purchasing in the same market. If the answer is yes, then the value of each home will increase or decrease concordantly. The home you’re selling may go up, but so is the one you’re buying. You can sell for more, but you’ll also pay for more. Knowing this, it makes more sense if you’re financing in today’s market to purchase that next home now and lock in that 30-year interest rate at the low rate we see today.

 

The second thing to consider is the inherent unpredictability of the market itself. Nobody knows if we’ve already reached the top and are about to decline, or vice-versa. The only thing we do know is that right now it’s a seller’s market.  

Thus, our advice is twofold: a) don’t try and time the market, and b) if you’re purchasing in the same market, make that move now and lock in that interest rate.

Taking all this into consideration, the time to sell is now. Not only are you going to get more money for your home and have less to do as far as getting it ready to sell, but it will spend less time on the market.