What’s going on with appraisals?

The market has gone up significantly in the last year—L.A. County grew somewhere between 16% and 17%. Given that, today I’ve asked Brian McKim from House America Financial to give us a quick tidbit about what’s going on in the world of appraisals.

Simply put, a home appraiser goes out to the property, takes pictures and measurements, and then looks for comparable homes that have sold in the area. Most mortgage transactions require an appraisal report.

“There are usually solutions to issues with appraisals.”

The unique thing about this market is that home values are rising quickly. That means that some of those comparable sales the appraisers use haven’t quite caught up yet. Most of the time, contract prices are being supported by a full appraisal, but in this unique market, there are cases where the appraisal doesn’t match the contract price.

The good news there is that in almost all cases, there are solutions. There are ways to restructure the mortgage or work with the buyer and the appraiser to find a solution. Usually, we can still successfully close the transaction without much change to the payments.

If you have any further questions about appraisals in today’s market, don’t hesitate to reach out to us. We’d be happy to help you.