Kenneth Harney wrote about something Realtors have been seeing for some time in his latest column. As lenders shied away from anything that hinted at the "free and easy" attitude in the subprime loan fiasco, they also tightened their appraisal requirements. No longer could comparable sales from six months ago, or longer, be considered...appraisals now must be based on sales closed within 90 days. If there are none available, appraisers can use pending sales an even listed prices. In areas seeing a drop in prices in recent months, these comparables were often sold for less than the subject property.
If this happens, buyers and sellers will usually have to renegotiate the contract. Very few buyers are able or willing to make up the shortfall between the appraised valuation and the selling price. Unfortunately, sales often fall through if there is no middle ground. Just one more hassle in the already troubled real estate market.
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