Home Appraisals and Overpricing: Chadwick's REAL Tips Episode 5
Updated: Jun 29, 2020
Featuring JJ Jeffrey of Westerra Credit Union
Hey buyers and sellers! It's me Shangela and I am reaching out to all my furry friends to talk to your furparents if they are thinking about buying or selling a house. Chadwick’s got more tips for them on this week’s episode of Chadwick's REAL Tips as we welcome special guest JJ Jeffrey, Senior Loan Officer with Westerra Credit Union. Together we discuss how appraisal can be an unforeseen hurdle during Denver's HOT Summer Real Estate Market 2020.
The Denver Real Estate market just got a second wind and we are seeing a lot of bidding wars, much like Spring 2017. The only problem is that appraisers need comparables, or "comps," from the last 3 months to support those new record high price points. Now ask yourself, what began approximately 3 months ago from today (Mid-March)? The COVID-19 Pandemic was in full swing and we began to see an economic shutdown. This no doubt affected the sales and pricing of real estate. Hence, the comps being used today are using what we call "COVID COMPS" - or comps taken during the period of economic duress. Homes today and in the near future may tend to be appraising slightly lower than normal until we have another three months of "normal" market conditions.
Beware an “appraisal gap” -- where the appraisal comes in lower than the listing price or offer price. A loan will only cover the value officially given during an appraisal.
If COVID Comps have lowered the appraisal value of your home, be aware as you select a listing price. If the potential buyer cannot make up the appraisal gap, your home will find itself on the market once again.
You can contact JJ Jeffrey directly at 303-618-1990 or email: email@example.com. He brings over 25 years of experience! Thank you for tuning in to this week of Chadwick's REAL Tips!
Interested in selling your home? Book a free consultation with Chadwick and Shangela today!