Growth and Thoughts about Real Estate

Low Appraisals and How to Handle Them...

Let's set the stage... You're selling your house or you're buying a house and you're currently under contract. The lender sends a licensed appraiser to conduct an appraisal on your home. A few days pass and the report comes back. But, the appraisal report shows a low valuation. What can you do as a seller? What do you do as a buyer?

There are various ways to handle a low appraisal and the side you're on in the deal might determine how you could/should proceed. One thing the seller must understand is the appraisal is belongs to the buyer because they have paid for that report and the seller is not entitled to it, unless the buyer gives authorization to release it to the seller.

If you're the seller, you can do several things:

1) You can accept the valuation, agree to drop the price to the appraised value and continue with the transaction.

2) You can request a copy of the appraisal and dispute it. In this case, your listing agent will have steps that they'll need to follow in order to request a second appraisal.

3) You can require that the buyer pay the difference in the appraised value and the agreed upon sales price at settlement.

If you're the buyer, a low appraisal could potentially be a good thing for you. So, here are several things you could do, if the appraisal comes in low:

1) You can request that the seller agree to drop the price to the appraised value, and both parties proceed with the transaction.

2) If the seller isn't willing to reduce the price, then you have the option of walking away (if an appraisal contingency was negotiated in your contract)

3) If your lender agrees and you have the financial ability to do so, you can negotiate a price greater than the appraised value, but lower than the initially agreed upon sales price. It would be good to discuss this with your lending team and your real estate agent, as there are circumstances that could affect this being a viable option.

Around the Neighborhood

^{Market Update from Jennifer Hay, REALTOR® August 2023}

Months Supply of Inventory: Currently, there are 3.05 months of inventory available in Ocala. Over the past 12 months, the supply has increased by an incredible +45.93%. This means more options for buyers and a competitive market for sellers.

List to Sold Price Percentage: For sellers, you'll be pleased to know that the average list to sold price percentage is 98.1%. This indicates that properties are selling close to their listing price, demonstrating strong demand and a fair market value.

Median Days on Market: Homes in Ocala are spending an average of 40 days on the market before being sold. This quick turnover suggests a healthy and active market, where buyers are motivated to make offers on desirable properties.

Median Sold Price: The median sold price for homes in Ocala is currently $284,000. This figure reflects the midpoint of all sold properties, indicating a steady and stable market where buyers can find properties that suit their budget.

If you're considering buying or selling in Ocala, now is a great time to take advantage of these market conditions. As an experienced REALTOR® with Newmark Real Estate Group, I'm here to guide you through the process and help you achieve your real estate goals. Contact me today for a personalized consultation!

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