On the side for sellers. Now here’s some, one big one, you for sellers the way, however you look at it, buyers too, but it’s the appraisal and they’re not coming in where we want them to. And they’re coming under purchase price or agreed upon price things to keep in mind. Whichever side you’re on is that transactions that are pending or active listings are typically not considered in the final opinion value.
You can’t say, oh, I’m in contract for $950,000. And there’s another comparable four bedroom house to that at 1.2 I’m golden. Right. And I know that’s the thing. Issue with appraisals is they look at historical closed transactions and that’s what they’re basing their appraisal off of. That’s the challenge we have, especially in an upward moving market, trying to substantiate these prices that are, or these agreed upon per purchase prices that are pushing the envelope on an upward moving trend.
Keep in mind, one fourth of offer prices are higher than appraised value. One out of four times, we’re coming out short, right? One way that the seller can help or the seller with assistance from your realtor, your agent is to detail itemize, any improvements or innovations that you have and provide it to the appraiser.
And if you have invoices or cost. Or the price that you paid to do these improvements or renovations that also helps is it’s not the silver bullet and it gets you up there, but it helps provide perspective to the appraiser. And if anything, it’s evidence for them to substantiate a higher, uh, praises as a realtor, never afraid to talk to that.
Praiser you don’t want to influence them. Make them think you’re influencing and every appraiser is different. Some appraisers, I think they’re their guide. In some case, they are in this situation because our hands are tied, but oftentimes appraisers are very amicable and friendly and I’d like to talk to them, let them know about the improvements that have gone on what makes this property more valuable than others and how, or.
Why it may be perceived as less, but why it’s not just letting them know your opinion. There’s no harm in that. Assuming that the prisoner is open to discussion and to talk about it, sometimes I’ll even provide like a packet of information, but it is what it is. They’re going to pull the comparables and you know what they say, goals, you can contest it on the buyer’s agent can contest it.
Or if it’s on the VA side, if it’s a Tidewater, there’s a process where you can appeal. But at the end of the day, You’re at the whim of the appraiser. Just do what you can to increase the chances of that praise of coming up, because it’s in the benefit of both the buyer and the center for it to come out, regardless of what I put as a fourth bullet point, which is an appraisal clause.
If anyone has been putting an offer. Recently and to get a fighting chance, you should all know what an appraisal clause is, right? In terms of the buyer is willing to come up with the difference of the appraisal clause versus the purchase price. In order to ensure that you close, ideally on the seller side, you would want to have a buyer who submits an appraisal clause and that they’re financially able to, to do so if it does come on.
And on the buyer side to increase your chances of winning in a multiple offer situation or getting your offer accepted appraisal clauses are going to help you in the light of looking like a stronger offer for this center.