Sage Realty Discusses Appraisals in the Rising Market of Main Line Homes for Sale

Main Line Homes for SaleSeptember 20, 2017 – Wayne, PA – Sage Realty, whose Realtors® help buyers find Main Line homes for sale, have noted a recurring trend in rising markets that both sellers and buyers should be aware of:  The property owners’ estimates of their home values are often higher than the valuation given by official appraisers.  

The trend and observed effect is also backed up by more rigorous studies.  Numbers from Quicken Loans suggest that sellers in the northeast are often overestimating the value of their property by 1.94%, and even more in the Philadelphia area.

Such differences can lead to difficulty in getting mortgage approvals for Main Line homes for sale, particularly if the agreement is for full price.  Banks financing buyers’ mortgages use the numbers presented by appraisers, so they will frequently refuse to offer a loan in the full amount of the seller’s asking price.  Sage Realty has seen deals fall through because of this.

Disparities in the appraisal ratios have become more common since the housing bubble, when regulations were put into place in an attempt to avoid loan defaults caused by buyers acquiring homes that they could not afford.

A 2014 study on the effect of the regulations by Lei Ding and Leonard Nakamura of the Federal Reserve Bank of Philadelphia, help explain why the effect may occur.  They state “Buyers, sellers, and real estate agents, as well as lenders who do not bear the risk of originated loans, all have a vested interest in getting an appraisal that is not less than the contract price and completing the sale. The way to ensure the deal is for the appraisers to assess slightly higher than (or equal to) contract prices.”

The regulations intended to have appraisals done by parties who were unbiased about the specific purchases being approved. In the aftermath, many appraisers have become very conservative, causing home sales that might reasonably be approved to fall through due to buyers being unable or unwilling to make up the difference in offered loan amounts.

In a rising market, such as the one we are experiencing, the impacts are more easily seen because competition for the relatively low number of Main Line homes for sale tends to push home prices up, while appraisal values may lag behind.

Sage Realty urges buyers and sellers to be flexible when working with Main Line home sale prices if they find themselves in disagreement with official appraisers. Working with experienced Realtors® may enable both sides to find ways to compromise, or in some instances, challenge the appraisal value.

About Sage Realty, LLC

Many Realtors® in Pennsylvania aid in the search for Main Line homes for sale, but Sage Realty’s mission is to find the perfect home for each client with no other concerns or conflicts of interest, which has made them trusted real estate agents in the Main Line area. For knowledgeable guidance in buying or selling Main Line real estate, contact 610-687-4000 or visit https://www.findahomeinpa.com/.

 

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I moved to PA from Washington State and learned that realty is local. There were things that I thought I knew about buying a house previously but boy was I wrong. Linda was very patient with me but also did not hold back when she saw potential problems, and always made sure I had all the information I needed before making a decision and didn’t belittle concerns to just get a sale. Above all else, and this was the most important thing to me, Linda has a high ethical standard, is very transparent in her approach and is someone I trusted making one of the biggest decisions of my life. – A. Lindsay (Courtesy of Google)

 

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  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
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  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Hear from our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

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