Jorge Hernandez, Weekly Newsletter

Dated: October 20 2021

Views: 165




Jorge Hernandez

Your Real Estate Consultant for Life! 





Click below to view...



New Construction Homes in Lee County


When a House Doesn't Appraise For the Sale Price


The real estate industry has been experiencing one of the hottest markets in history. This is due to low interest rates, historically low inventory and more than usual buyers flocking to the market, thus, homes have been selling in record time. As a result, home values have been increasing. In fact, according to the National Association of Realtors, "94% of metro areas saw double-digit price growth in the second quarter of 2021." Buyers are offering sellers prices considerably above list price in many cases.


Real estate appraisers however are acting more level-headed. It's their job to protect the mortgage companies' investments. There are many instances nowadays where a house doesn't appraise for the price on the contract. This impacts the lenders, the sellers and the buyers in the transactions.


How It Affects Lenders

If you are not paying cash for a home in today's market, you are most likely obtaining a mortgage loan. Many buyers are placing a down payment of 5%, 10%, 20% or more on the homes they are purchasing. The more money you put down, the less risk the mortgage lender has in the transaction. The less money you put down, the more risk the lender has. It's an appraiser's job to protect the mortgage lender's investment in a home. An appraiser looks at previous sales data when appraising a home. If the property value isn't supported by other comparable sales in the area, the appraiser may not appraise the home for the contract price. The lender will only lend the loan-to-value amount of money to you, the buyer.


How It Affects Buyers

If the home you are purchasing doesn't appraise, you are in a bit of a bind. It may be good news or it may be not-so-good news. You have a legal right to ask the sellers to sell you the home for the appraised price. However, in today's sizzling hot seller's market, many sellers won't agree. You may be asked to come up with the difference between the appraised price and the sales price on the contract. If you don't have the money to do this, the contract may have to be canceled under the financing contingency. Should this happen, you should be protected under this contingency and you should receive your earnest money back. Some buyers who have extra money in their savings actually waive the appraisal when they write the offer. In this instance, you will have to pay the amount higher than the appraisal price.


How It Affects Sellers

In today's market, sellers are in the driver's seat. If the house doesn't appraise for the home value you sold it for, you should ask the buyers to come up with the difference. This is a common practice in a super seller's market as we are experiencing now.


The Three Usual Outcomes

One of three scenarios can happen when a house doesn't appraise for the price on the contract. The first is that the home will sell for the appraised property value. This means the sellers will come down to the appraised price. This is more typical in a buyer's market. The second scenario is that the buyers are asked to pay the difference. This is happening more times than not in today's market. The third scenario is that the buyers and sellers meet somewhere in the middle. This is common in a more balanced real estate market.


Appraisers are more in control of home values than many people think. They don't have any emotion in the transactions. They work for the mortgage lenders. Sometimes they don't appraise homes for contract prices.









Alternate text



All South West Flordia Available homes RIGHT NOW! In Cape Coral, Fort Myers, Lehigh, Naples and more... 


List of * Available Homes RIGHT HOMES*






Please respond with any questions


Looking for the best agent in South West Florida?
 I will take good care of you, your family and friends



Call/Text Jorge Hernandez 239-878-5777

Or, Email me here 



Blog author image

Jorge Hernandez

Jorge Hernandez is a realtor who is driven by his dreams. As a resident of Florida for more than 40 years and Southwest Florida for over 15 years, he knows the area as good as anybody you’ll ever fi....

Latest Blog Posts

Real Estate News You Can Use 😏

  The latest real estate news for you  Jorge & Clara HernandezYour Real Estate Consultant for Life! The Highest Producing Agents in South West Florida     

Read More

Top Deal of The Week!!!

Top Deal of The Week! Immaculate move-in ready. Located in a very desirable area of Cape Coral area. Look no further! Beautiful, spacious, 3/Den bedroom home. Recently remodeled all tiled

Read More

Jorge Hernandez, Weekly Newsletter 10-26-2021

  Jorge HernandezYour Real Estate Consultant for Life!           Click below to view...  New Construction Homes in Lee County YEAR

Read More


        YEAR-END OUTLOOK: A ‘TICK TO TORRENT’ OF FORECLOSURES EXPECTED IN 2022 Editor’s Note: RISMedia’s Year-End Outlook series provides an in

Read More