2010 brought a lot of change to our real estate market here in Hutchinson, MN. There had been an increase in the number of foreclosure and short sales as well “normal” sales.
One of the challenges for all of us, realtors, appraisers, buyers, and sellers has been to find the right home values for homes that are being sold.
The increase in the foreclosures and short sales have put downward pressure on the “normal” sales. That being said though, we actually saw a stabilization in the average sales price for the homes sold in Hutchinson, MN during 2010 over 2009.
The appraisers have struggled with submitting appraisals to lenders only to have the lender’s underwriting departments ask for more comparables or actually ordering another appraisal if they aren’t satisfied with the first one. Unfortunately, when that happens the buyer must decide if he is willing to pay for another appraisal, or drop out of the sale. We haven’t seen a large number of these happening here, but enough that it has become a concern.
The lenders have gone from expecting the appraisers to do whatever they have to in order to come up the appraised value that the lender wants, to dissecting the appraisals beyond what is sensible.
So, even after the realtor and the seller decide on an asking price, and a buyer and seller have come together on a sales price, that doesn’t mean it’s over and everyone will meet at the closing.
At Hometown Realty we try to make sure all the parties involved know what complications could arise, so there are no surprises.
I expect that as we enter 2011 all of us will continue to face challenges that are new!