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Low appraisal values delay real estate sales, refinancing

Many in South Carolina may be looking to take advantage of a stabilizing real estate market. Whether buying, selling or refinancing, real estate transactions can prove to be beneficial for all parties involved, but can be disrupted quickly if details aren't minded.

Homeowners who have been sitting on well-maintained homes looking for a solid opportunity to sell may be anxious to sell their house in a rebounding market. At the same time, many may be looking to refinance their home at lower rate in order to save money. In both situations the transactions may hinge on one procedure: appraisal.

When a homeowner receives an appraisal of their home, they have the right to expect that the appraiser has the skills to consider all relevant factors when valuing property. As many people throughout the country are discovering, appraisals are regularly coming in far too low, which can prevent home sales or refinancing.

Industry observers suggest that appraisers simply aren't appropriately weighing factors that range from the state of the neighborhood housing market to the current condition of the home. Appraisers may not be able to accurately account for homes in neighborhoods with houses being sold on short sale or foreclosure.

Meanwhile, some believe that appraisers operate too closely to mortgage lenders, which has potential to doom real estate transactions even before they're initiated. When values come in low, mortgage lenders may not be willing to refinance mortgages for homes with depressed values.

The Consumer Financial Protection Bureau has taken notice of this problem and is taking steps to help homeowners ensure properties are accurately appraised. They hope that more transparency in the process will push appraisers to act more effectively.

Reports of transactions being prevented for unnecessary reasons serve as a reminder of everything that must be taken into consideration when making moves on the real estate market. This is why it's important to remember that you do not have to go through often confusing transactions without reliable advice and assistance.

Source: Los Angeles Times, "Appraisal can complicate selling, refinancing a home," Michelle Hofmann, Nov. 11, 2012

  • Our firm has experience helping South Carolina residents sort through the details of complex real estate transactions. To learn more, please check out our Charleston real estate refinance page.

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