Home values are rising in many U.S. markets. The S&P/Case-Shiller Index has home values up 1.2 percent as compared to last year, and the government’s Home Price Index shows an increase of 3.7 percent.
This has been partially evidenced by rising median home sales prices nationwide. Versus last year, the median sale price of a new construction home has climbed 17 percent, and the median sale price of an existing home sale is higher by 10 percent.
For home sellers, an improving market means the chance to net more proceeds from a home sale. Or does it?
In this 3-minute piece from NBC’s The Today Show, we hear about the home appraisal process and how it may be limiting the number of home sales nationwide, plus the prices at which homes are selling.
The interview includes several key insights into the home appraisal process :
- In a rising housing market, a home’s appraised home value may be lower than its “true” market value
- Short sales and foreclosures can make a negative impact on a home’s appraised value
- Consolidation in the appraisal industry has lowered product quality and may be harming valuations
One key take-away from the video is that home owners in Chicago should provide their home appraisers with as much relevant information as possible — especially information which may not be publicly-available. This includes records of recent “all-cash” sales of comparable homes which were never formally listed for sale.
One in three purchase agreements are canceled because of appraisal issues, according to the interview. Take steps to make sure yours is not among them.