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How Do Appraisals Increase?

MagdalenaLee
9 years ago

Okay, this might be a really dumb question but here goes anyway:

We live in Central TX, the home of stable/affordable real estate. However, we've been pegged as the fastest growing area in the country and home sales have changed over the last year. In previous years, average DOM was about 3-12 months, depending on price range. Over the last year, homes, at all different price ranges, are selling within days. Prices are not that different, hardly an increase from a few years ago.

So I'm thinking that everyone needs to raise the price of their home and let them sit on the market for a few months instead of days. However, that won't work if they don't appraise properly.

So how, in a shifting market, do homes appraise for more if asking prices are flat?

Comments (2)

  • kirkhall
    9 years ago

    Multiple offers that cause the accepted offer to be higher than asking.

    Then, people with more cash than minimum needed so when the appraisal "isn't high enough" they can make up the difference in cash and the sale proceeds anyway.

    With the higher sales price that gets recorded, appraisals will also be higher because sold "comps" will be higher.

  • C Marlin
    9 years ago

    Over 40% of house purchases are cash, those don't need to meet lending requirements but do count as comps..