- Appraisals often come in lower than expected – mainly because they count in foreclosures in the ‘comparables.’ This has set up a feud between real estate agents – who think that what a buyer is willing to pay is the only validation of market value that a lender should need – and appraisers, who maintain that their trustworthiness depends on doing a thorough job that mirrors market realities.
- Buyers don’t qualify after all. Household debt is starting to edge up again. Unemployment is down, but employment isn’t necessarily up. A buyer might make an offer in good faith, then be hit with hard economic circumstances that make closing impossible.
- Buyers don’t have the equity they need from their own homes. Anyone who bought in the past seven years doesn’t have much, if any, equity in their homes. They just don’t have enough to overcome financing hurdles that have cropped up since they purchased their homes.
Image courtesy of Morguefile contributor dubois.