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Market shift and low appraisals SHORT VERSION Summer 2022

Market shift and low appraisals. I wanted to do a quick video on the current state of the market and possible appraisal shortages.

The real estate market in the Washington DC area, 2022

So I think the market not unlike in 2008, may indeed be ready for a shift. Is it going to fall and correct and prices are going to go down. Or crash? I don’t think so. At least not in our area. Because in DC, Maryland and Virginia, we have jobs. We’re in a great jobs environment. People make good money, people have good credit in general. And I think that’s what supports values.

So while things may not go up in crazy percentages going forward, I don’t know that there’s going to be a massive correction. Maybe there will be in other parts of the country, I don’t know. But I know for our area, I feel like we’re somewhat insulated and that the damage if it’s coming will be minimized. Having said that there could be more appraisal issues to some small degree. And you have to be ready for that.

Realtors and appraisal challenges

And the highlight here is that you as a realtor need to be involved in the appraisal challenge process. And the appraisal challenge, I can tell you, you’re never going to win it by arguing square footage adjustments. Or they took a bad picture of the bathroom. It’s never going to work. You really need to find preferably three new comparables that the appraiser didn’t use. And don’t just do a zip code search. Really go with a fine-tooth comb and find three really great comps or as close as possible that the appraisal didn’t show and maybe missed. And show why you think that these are better comps that might support a better value.

Doesn’t mean you can’t debate if there was something egregious missed in the appraisal. But they’re typically isn’t. Appraisal challenges are really all about new comparables and making those comparables as good as possible. Like I said, a generic listing of homes you searched in the zip code won’t work. Check square footage, check bedroom count, check every little detail that you can. And make sure that the comps are as close as possible to the subject property.

Conclusion – Market shift and low appraisals

Not expecting there to be big drops in prices. Like I said, not expecting there to be this increase in appraisal shortages. But maybe to a small degree, you might come across a time or two. And it’s good for you to be prepared. Really, really dig in and help your lender find really great new comps. That’s the magic. Take a look at the longer video, because I go into a lot more detail. And there’s really a lot more to it. If you really want to be educated on the market and possible appraisal shortages and how to handle them. Because I’ve handled a few myself. You really should take a listen to the longer video. Thanks.

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