Upside Down on her Coral Gables Mortgage?
A Seller listed her property with us last week near Coral Gables. She purchased the property with us 3 years ago and feared that she was upside down on her mortgage based on the low assessed value of her home in the Dade County tax rolls. We agreed to meet to analyze true market value vs. assessed value.
When we met, it was apparent that her home would have MANY interested buyers (specifically, first time buyers). It is a home that features 3 Bedrooms/3 Bathrooms/ 1 Car Garage along with a desirable location next to Coral Gables with a large, private back yard.
The closed sales around this home over the past 6 months were surprisingly low (short sales and foreclosure sales). The available listings around the area were not as low (this is usually the case).
This told me that attracting buyers to this property at the price she needed would not be the challenge. Our challenge would be THE APPRAISAL.
Preparing the property to be Listed…
I recommended two things to prepare the property for market:
1) de-clutter the house and showcase the space in each room
2) have the wood floors in the home re-finished (I provided her 3 vendors to consider)
She and her husband executed this strategy and we listed the home. Within 3 days, we had 6 offers on the table which were mostly FHA offers (first time home buyers). All of them came in within $5,000 of asking price and some were over asking. Ideally, one of those offers would have been cash thereby avoiding the requirement for an appraisal in order to obtain financing. Being that this is not the case, our Seller chose the strongest offer with the most cash down and the strongest overall terms.
Now we wait for the appraiser’s verdict in the coming days. Despite the fact that there was a bidding war on this property (thereby determining true market value for the home), the deal rests firmly in the hands of the appraiser that this Buyer’s lender chose. Four different appraisers will arrive at four different market values because appraising is an art an not a science. The appraiser won’t be assigning value based on true market value but instead they’ll base it on past sales. This, in my opinion, is not an accurate way of determining value since the closed sales over the past 6 months were distressed sales in our market’s rear view mirror. Today, there is 40% less available Dade County inventory than there was just 14 months ago. Demand remains strong while supply continues to tighten.
We will see the appraisal outcome in the coming days.