What is the biggest problem in the real estate market right now? Appraisals.
Here's the situation... let's say that you are a seller that wants to sell your house for $800,000, but the sold comparables are pointing more to a sales price of $650,000. You can still try and sell your house for that price, and someone certainly may pay that price. However, don't expect a bank to give that buyer a mortgage for $800,000.
So then, either the deal falls apart and you have to put your house back on the market, or the buyer will try and renegotiate the price with you so that you come down to what the bank says it is worth.
By the time that happens, your home has most likely been under contract for 30 days and you are ready to move.
So, if you overprice your home, and someone pays that price, you had better hope they bring cash to the table, because they certainly can't get that mortgage.
Here's a good article about appraisals that was in the Chicago Tribune over the weekend.
Kati Spaniak is a Real Estate Broker with @properties specializing in selling real estate in Northbrook and a 37-year resident of Northbrook. .
