You probably have some pretty crazy stories, with all your years of real estate experience with buyers and sellers. Part of your expertise includes a unique ability to negotiate and help close gaps when the deal seems too far apart to come together. And over the years, you’ve gotten creative with your solutions to these types of problems and common hiccups with your real estate transactions.
Sometimes, it’s an issue with your sellers who believe their property is worth more than the market will bear. In these instances, the appraisal and asking price might be too far apart for you to even close. So, what can you do? What new resources are available to help in these scenarios? Today’s agents are finding new solutions to some of these common real estate transaction problems. And Listing Profit Remodeling might be the best partnership you didn’t know you needed.
Understand Why There’s a Gap Between the Appraisal and the Seller’s Asking Price
When the appraisal is significantly lower than the asking or purchase price, it’s bad news for buyers and sellers across the board. In some cases, that gap is so big lenders won’t be able to extend financing to buyers for more than the appraised amount. And the sellers, despite your best efforts to communicate with them, may not want to drop their asking price, either.
Before making any moves, some agents advise the sellers to request a copy of the appraisal. Together, you can review to see if there potentially has been an oversight or miscalculation. Alternatively, if your sellers are holding steady on an asking price that’s too high, you might be able to coach them through negotiating down or even talking about offering seller financing.
Reasons an Appraisal Might Be Low
To help agents better understand what to do next, it’s helpful to look at the contributing factors of a low appraisal. Here are some reasons that might be affecting your current appraisal-to-asking price gap, according to Zillow.
It could be an appraiser problem.
Inexperienced appraiser: A poorly trained or unfamiliar appraiser can produce a lower appraisal.
Poor evaluation: An appraiser doesn’t properly take into account improvements, including upgrades, new popular features, or more upscale amenities.
It could be a real estate market factor.
Rising market values or sellers’ market: In a sellers’ market, bidding wars and general market demand will often drive home sale prices far higher than actual appraisals can support.
Slowing market values or buyers’ market: In a buyers’ market, your sellers may inadvertently overprice their homes because they’re not aware of how much their value has decreased. An abundance of foreclosures and distressed homes in the neighborhood can also affect the home’s value.
Listing Profit Remodeling Can Help
When real estate agents work with Listing Profit Remodeling, they reduce these scenarios in which appraisals come in well below the asking price of a home listing. Our Equity Rescue Program allows your sellers to explore remodeling, renovating, repairing, and upgrading their homes before putting them on the market. These improvements translate to realistic appraisal values, improved marketability, and even fewer days on the market. The best part for your sellers, they don’t have to put any money down or deal with credit checks. Instead, they use the home equity they already have to initiate the projects needed. They don’t pay a dime until closing, which is often immediate and includes a much higher asking price.
If you’re tired of trying to bridge the gap between your seller’s asking price and the actual appraisal, start exploring a better way to get, improve, list, and sell properties with Listing Profit Remodeling!