Homeowners today are more educated when it comes to selling their homes, thanks to the internet. They no longer have to solely depend on appraisers. This is one of the reasons this gap has narrowed. The information available to the homeowner is not just opinion but the savvy homeowner searches multiple sites to check the facts are about what has sold in their area. They also might have contacted a local Realtor to get a CMA on their property.
In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 4% or more over the next twelve months. One major challenge in such a market is the bank appraisal.
When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.
Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.
In the latest release, the disparity was the narrowest it has been in over two years, as the gap between appraisers and homeowners was only -0.5%. This is important for homeowners to note as even a .5% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home)
Are you thinking about selling and curious about the value of your home? Contact us for a free CMA and see where you stand in todays market.
See the chart below for the changes in home price estimates over the last two years.
