[photopress:down.jpg,thumb,alignright] Very interesting article by Kenneth Harney in Seattle Times today.
Of specific note is this quote from the article, “Some mortgage lenders and relocation companies now expect appraisers to examine a wide range of data they never emphasized during the boom years.”
Last night I had a nice chat with a seller regarding how the appraisal process can negatively impact the price at which his home can sell for, if the purchase is financed. This is not true of all homes, but it was for his particular home.
When lenders start getting nervous about the future of home prices, they start putting downward pressure on prices, by requiring that appraisers to be more careful not to overvalue for mortgage funding purposes. While the “lenders and relocation companies” may be nervous based on something that is not happening in the marketplace of this given house, that nervousness can result in properties not appraising.
When the lender will only fund 80% of what THEY think the property might sell for in the future, the buyer will have to make up the difference in cash, in order for the seller to get the agreed upon price. If the buyer is not willing to pay that difference in cash, then the house may not be able to sell for “what the market will bear”.