Although the buzz about bidding wars is true, Campbell/Inside Mortgage Finance HousingPulse Tracking Survey reported that bidding wars did not boost prices in its findings. Homes are selling below the list price, and if a home is subject to a bidding war, the high offer becomes quashed by lower appraisals. According to the report, homes sold in April received only two or three offers, and average home prices declined slightly from March to April.
The average number of offers for non-distressed properties sold in April was 1.9, according to the nationwide sample. Distressed properties received more offers, with damaged REOs averaging 3.5 offers, move-in ready REOs 3.1, and short sales 3 offers.
On the Westside, we are experiencing bidding wars on desirable properties in all price ranges, but many times the appraisals don’t come in at the contract price. The appraisers are keeping the transaction prices down even when buyers are willing to pay more than the comparables suggest. This is often the case when the market begins to turn around, and comparables are not yet in place to support rising values.
For my Sellers, I am advising that they list their home based only on the closed, not pending, comparables, and be aware that overpricing or overselling may result in a problem during escrow. Be prepared to have the home appraised more than once, and be flexible about valuation. For Buyers, be sure that you have a long enough appraisal contingency in place so that, if you need a second appraisal, you have time to get it.
The Bremner Group at Coldwell Banker
ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) (310) 800-2954
Accredited Buyer Representative | Certified Distressed Property Expert | Pre-Foreclosure Specialist Certified
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