I just sent out my monthly newsletter (if you don't already receive this, please drop me an email at anne@annefashauer.com) and in that I covered the foreclosure process, mostly as it relates to buying a bank owned property. One subject that came up there that I want to talk a bit about here is the appraisal process.
What we've been seeing in the past two years, as prices have continued to fall, is a reluctance on the part of sellers to bring their asking price in line with the current market. Everyone has a hard time swallowing the "loss" of up to half the perceived value of a home. What everyone needs to keep in mind that the value of the home is only what someone is willing to pay for it. If you have owned your home for ten years or more then even in today's market you home is still worth significantly more than what you originally paid for it. Only if you bought your home when prices were high and are trying to sell now are you really going to lose money - really lose it. Otherwise your "loss" is only on paper.
Value is also going to be reflected in the appraisal. Let's say you get a nice offer on your home at or near your asking price. The prospective buyers need to get a loan to pay for 80% of the purchase. The lender will require that the property be appraised and will only lend up to that amount. If the offer is more than the appraised amount, you could see the end of your sale right then. At that point you can negotiate with the buyer to purchase at the appraised price; you can also ask for a second appraisal and hope that comes in higher than the first one. Someone will have to pay for this second appraisal and that can be negotiated between the buyer and seller. My point is to think about this before you price the home to go on the market. Make sure you are getting a good CMA (comparative market analysis) from your agent and pay attention to what she or he has to say about the current market. Afterall, this is what this person does to make a living, what they pay attention to day in and out, and it's their expertise that you want on your side. You may not like what you hear - who wants to know their home isn't worth what it was two years ago? - but try to listen objectively if you can. Putting the right price on your home is going to get it sold quicker and with less dilemmas than overpricing it and is going to help ensure it appraises just fine.
There are local sing-alongs in both Elk and Boonville and I believe the Greenwood Community Center in Elk is going to have another pizza day the last Saturday of the month. I went to that last month and it was a lot of fun. There were so many good pizzas coming out of that oven! Everyone brings dough and toppings, you make up the pizza, it goes in the oven and in about three minutes it's done. Everyone slices up their pizzas into thin slices so everyone can have a taste. The only down side was filling up before all of the pizzas finished being made! I encourage anyone interested to bring their dough and toppings to the next event. Yum!
Until next week, stay dry and don't overdose on shopping!