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NAHB reported that many new homes are being appraised under their contract sales price, hindering sales
December 14, 2011
NAHB reported that many new homes are being appraised under their contract sales price, hindering sales.
The National Association of Home Builders (NAHB) reported on their blog that flawed appraisals might be preventing home sales.
A recent nationwide survey conducted by NAHB indicated that one out of three builders are reporting losing signed sales contracts during the preceding six months because appraisals on their homes are less than the contract sales price.
A lowball appraisal can come from comparing brand-new homes with appliances and interior upgrades with distressed properties in disrepair. The result, in many cases has been that the new house is appraised at less than the cost of construction.
The NAHB survey data confirm this, where a full 60 percent of respondents reported they were experiencing appraisals coming in below their contract sales price.
Of those reporting that they had encountered this problem, 53 percent said the appraisal amount was actually less than the cost of building the home.
To read the blog, click here.
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