Boston Real Estate
Boston Beacon Hill condos: What you should know about Appraisals in 2021
You’ve made a successful offer on a Boston Beacon Hill condo. You’re already picking out new curtains but your real estate agent says – hold up. Let’s get through the appraisal, because that’s the #2 way real estate deals get sidelined in this city. (The first is a bad home inspection.)
Really? Oh yes, what sounds like a formality is so much more than that. Here’s what you need to remember, and what you and your Boston Beacon Hill Realtor can do to prevent the appraisal ruining your plans.
The appraiser isn’t working for you.
Unlike your buyers’ agent, the home inspector, and your lending officer, the home appraiser isn’t working on your behalf. Their job is to ensure that the value of the Beacon Hill home is similar to the amount you’ve offered to pay for it. Ideally, they can also protect buyers by putting a limit on inflated Beacon Hill condo prices. Your lender won’t write a check for anything beyond what the appraiser says it’s worth. Unfortunately, that can leave buyers hanging when they’re willing to pay a little extra to get what they want.
Even if you are buying with cash
an appraisal is not a bad idea. In Massachusetts, a home sale can be contingent on the home inspection and/or the appraisal (in addition to other contingencies), and each gives you slightly different advantages. If you offer cash, there is no appraisal contingency unless your real estate agent adds it in (it is typically tied to the financing contingency). In a seller’s market like this one, it isn’t always a good idea to add more contingencies to the agreement, but depending on the scenario, the appraisal can be a good option. Talk to your real estate agent about how to put a home appraisal to work for you, even if you’re buying with cash.
A low appraisal is not a deal-killer
Say you’ve put an offer in on a Beacon Hill condominiums for $600,000. The lender sends their appraiser over and she comes back with a home value of $590,000. D’oh! There are a couple of things you can do: Ask the seller to lower the price (not all will, but it’s worth a try), or you come up with the difference in cash. Many times the issue is solved with a little of both, the seller comes down and the buyer brings in some cash. The lender can still pay $590,000, and if you have $10,000 extra, you’re good to go.
Your real estate agent can help
Whenever possible, we have the buyers’ agent meet the appraiser at the door to hand them a listing of the home’s key features, as well as what are called “comparables”. These are other homes in the area that have sold for close to what you’re offering, that have a similar profile of amenities. Often, appraisers are overworked and may miss some key features, so any information your real estate agent can provide will help.
Appraisal results are not typically available right away.
In fact, the average time to close on a Boston Beacon Hill property is currently around 45 days; a significant part of that is waiting for appraisal results to come back.
Boston Condo Appraisals in 2021
We are seeing instances where the Boston condo appraises for less than what the buyer offered. As part of the mortgage approval process, the buyer’s lender orders an appraisal. In some cases, the buyer proceeds with the purchase and kicks in some more cash, and in other cases, the sale price is re-negotiated.
My gut hunch is that a Boston condo buyer can pay too much for a condominium. If the buyer can stay in the home for many years it probably doesn’t matter much. If for some reason the buyer needs to sell in a few years and interest rates go up slightly the buyer may have trouble even breaking even after selling.
This is a wonderful time for homeowners who wish to sell a downtown Boston condo. Boston real estate in downtown and in the suburbs in most price ranges are selling quickly and for top dollar. Homebuyers can expect to pay a premium and face a lot of competition. Buyers who pay cash or who have large down payments have an advantage
Boston Real Estate and the Bottom Line
Have more home appraisal questions? Your Beacon Hill real estate team is here to answer, anytime. Contact us today!
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The property listing data and information, or the Images, set forth herein were provided to MLS Property Information Network, Inc. from third-party sources, including sellers, lessors, landlords, and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information, and the Images, are for the personal, noncommercial use of consumers having a good faith interest in purchasing, leasing, or renting listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing, leasing or renting. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information, or as to the accuracy of any of the Images, set forth herein. MLS PIN data last updated at November 16, 2024 11:40 PM ET
The property listing data and information, or the Images, set forth herein were provided to MLS Property Information Network, Inc. from third-party sources, including sellers, lessors, landlords, and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information, and the Images, are for the personal, noncommercial use of consumers having a good faith interest in purchasing, leasing, or renting listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing, leasing or renting. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information, or as to the accuracy of any of the Images, set forth herein.
