Low Appraisals Hurting Home Sales

Washington, DC, March 1, 2011 — Low appraisals, thanks to a glut of foreclosures, are killing some home sales, according to a story in USA Today.

It’s an issue that is rarely a problem in a healthy real estate market.

Ten percent of U.S. Realtors said they had sales canceled because appraisals came in below the prices buyers agreed to pay, according to a January survey by the National Association of Realtors.

In addition, another 15% said contracts were renegotiated after appraisals came in too low. Sellers dropped prices or buyers put up more cash.

A third of home builders said they had lost sales because of low appraisals, according to an August survey by the National Association of Home Builders.