What is going on with Home Appraisals in 2021? - YouTube

Appraisals in 2021.

What is really going on out there?

What is happening?

We're gonna go over that entire thing.

Just make sure you watch, like and subscribe.

Let's get into it

All right Sascha Chatman here  with Chatman Realty Group.

Your favorite realtor here in DFW.

So we're talking about appraisals  what's really going on in the market?

And we're going to cover this whole thing.

So watch this entire video.

First things first, what is an appraisal?

It's opinion value.

That's it it's a snapshot in time.

It's an opinion of value in which an  appraiser comes out to value out the  

home that you're trying to buy if you're a buyer

Or the home you try to sell, if you're a seller

Based off what's going on  in the market at that time  

and they do that in order  to get your loan approved.

But it's a snapshot in time so an appraisal may  be worth on a particular home $300,000 in January

And then later come September  that home may be worth $350,000.

That's kind of what's going on right  now based off what people are paying.

So it's a snapshot in time.

I understand that but what's  happening in this market.

Let's talk about that.

People are going so high on the homes  that they're offering to try to win.

It's all about winning.

Otherwise you're out there forever  trying to figure this whole thing out.

That they're just waving their appraisals.

So let me give you an example.

Let's say a home is on the market for $300,000

I as your agent, I run the comps  for you based off what I'm seeing.

I'm saying you know what?

This house is probably  gonna value out around $315.

But in order to win the home based  on what's happening in the market,

People are going $330 and $350, and that is real.

So these two different numbers

Just don't meet right now.

You have home worth $350- $315,  you want to go $350. Boom!

They don't match.

That's where you have to  make an informed decision and

Everybody deciding differently

So that's what's going on in the market.

That's why people are going so much  higher we don't have enough inventory

blah blah blah blah blah

Not enough inventory, a lot of buyers!

Boom here you go!

It's a mad house right now. All right.

Now let's talk about waiving the appraisal.

What that actually looks  like and what that entails.

Here in Texas, you can waive  your appraisal if you want to

If you've got a conventional offer.

Now we have a form that is put together,

That allows you to do that.

So we're going to talk about fully waiving  your appraisal and what that really means.

If you fully waive your appraisal,

That means you don't correct  the appraisal comes in

That you're still going to  have an appraisal on the home.

So no matter if you're FHA,  Conventional, VA, USDA,

If it's a loan involved you're  getting a home appraised.

If you're doing cash, no appraisal.

Now when you can fully waive it,

That says, Hey I don't care what it comes in that.

Once again, if you're going to be offering $350  000 and the house is going to appraise at $315,

That means you are going to  be bringing the difference.

Yeah, yeah.

That means you're bringing a difference  if it doesn't come in at value.

So understand that.

That means you're going to bring your down payment

That means you're going to  bring your closing costs

And it means you're going to  bring a shortage of the appraisal.

Understand that's what it means.

So when you say,

I want to fully waive my appraisal  that's what you're talking about.

Okay that you have the money  you have the cash to do so.

So if you don't have the money to do that,

You need to think about that differently, okay?

There's another way you can do it.

You can partially waive it once again.

Same example $315,000 is  probably going to appraise that

You want to go $350 but you want  to protect yourself a little bit

And say, you know what?

I will wave it up to $335, 000

Meaning that long as the  house hits value at $335 000,

You're bringing the extra 15 G's.

You're comfortable with that. Okay

If it goes to $334, you can get out of it

Or you guys can try to negotiate again

But if it hits $335, $336, 7 whatever,

You're still buying at home and you're  obligated to do so that's what it means.

Now we get this question all the  time, can you wave the appraisal

If you're doing VAor FHA?

You actually can now.

It depends on what's going on with your state.

If there's a form with it or not,  because every state is different.

You check with your local realtor to see if  you guys actually have a forum for that or not.

For us here in Texas, the forum says  you can't do it with FHA or VA okay?

However, you can always get language  written in and special provisions.

It's best to get that done by a lawyer.

Get a Real Estate Lawyer to give you the  right language from that perspective.

And get that information out of then.

The only problem with that becomes this-

A lot of agents are misinformed about whether you  can wave it or not when it comes to the VA and FHA

And that's because there's  other forms involved with it

That says, oh that person's still protected.

So you need to make sure your  agent knows they're doing and

The lender does too.

Because you got to get around that  other language with the other documents.

It's called the FHA a mandatory clause.

The same thing with the VA as well, right?

And you have to have the  language that makes it airtight

That makes that seller feel confident  that you can truly waive that.

But a lot of people don't understand that

And there's a lot of misinformation.

If I was asked, 10 real estate agents  right now can you waive FHA or VA?

We would all disagree.

50 would say, yes. 50 would say no.

But there's also different  rules in different states.

So make sure you understand  what's going on with your state.

Same thing for you, Mr. Seller.

It's not just about buyers now.

What happens if a home doesn't appraise?

Let's talk about that.

If a home doesn't appraise a  couple things going to happen.

4main thing is going to happen.

Number one: The seller has to drop the price.

Now we're talking like if it doesn't matter  there's an appraiser waiver in there or not,

You know sometimes to get a deal done the seller  has to drop the price to the appraisal value okay

Number two: The buyer brings the extra money.

If the buyer actually has the money, they  bring the money forward from that perspective.

Number three: The two parties meet in the middle  where the seller drops the price a little bit,

the buyer comes up a little bit and  boom kumbaya we're all moving forward.

Number four: They don't agree the buyer backs  out deal is dead is dead now what happens.

When that happens it depends.

It really depends if you sign  an appraisal waiver and you  

waive your right to terminate due to an appraisal,

that basically means that you  can lose your earnest money.

That means if you put down $3,000 or $5,000, the  seller can take that money from the title company

and get remedies on that period that so  if you're waiving your right to appraise,

You need to understand your  earnest money is at risk because

what's happening in this market  right now, people just saying bump it

We'll bring it we'll bring it  we're good we're going to do it and

then it comes in fifteen  thousand dollars low and they say

whoa whoa whoa whoa whoa whoa whoa whoa whoa

I was good $5000. I wasn't good with $15,000

and people take a risk with  these contracts and then these

houses go back on the market we're seeing  a lot of houses come back on the market

because that is what's happening  and it's a done deal now.

Here's the thing here's a dirty little secret

I'm gonna give you guys a dirty secret here.

If the home is under contract with  VA or FHA and it doesn't appraise,

The appraisal stays with that  home but you didn't know that

you wouldn't know about that  it stays with the home meaning

that if you try to steal their home  to another FHA buyer guess what?

They're still stuck with that same appraisal.

So if their appraisal comes in low  it doesn't matter what FHA buyer,

you find next you're still using  the same appraisal so Mr. Seller

that means that you need to  have a buyer who has the money 

and needs to show you proof  of funds for my listings

I require people to show me proof of  funds when they're going over asking

and they are asking for an  appraisal waiver show us  

you got the money

Show me the money so I can show  it to my client and it will be

If they don't do that stuff that  airtight, so it's not offensive

If someone is asking you that Mr.  Buyer it's not being offensive

It's just making sure you can  move forward with the deal

So everyone needs to  understand how this thing works

but so many people are all over the place

Now here's one thing

Let's talk about new builds before we're done

New builds what's going with  appraisals with new builds

It's the same thing it used to  be that new build's like okay

We'll drop the price you can come  up with a little bit more money

Not now they're not because they  know if your home doesn't appraise

they can go sell to the next jack  over there for a whole lot more money

and they're guaranteed so you need  to understand the new build contract

That you have can they actually  terminate on you and move forward  

more than likely they can the  builder contract is in their favor

So make sure you and your agent understand that  

because they will put their  house right back out there

They will go highest and best with the next bill  

with the next person or  something like that and move on

Because if you got that house five  six months ago they're building it

and let's say that house  is under contract with 3 45

and today they can put that contract right back  

their house back out there  under contract with $415

and believing do they want  415 or 345 wouldn't you?

So you need to understand  appraisals are a very tricky thing

But I want to make sure you guys understand  what's going on in this market right now

because a lot of people are saying a  lot of things that quite aren't true

and people are not really that informed  if you're waiving your appraisal

You need to make sure you understand where  you are you can partially wave it as well

But make sure you have this conversation  with your real estate agent.

If you don't have a real estate agent  I'll be more than happy to help you.

If you're not in my area,  I got people that I help,  

I coach and I train that will take  care of you in your area all right

Make sure you like share subscribe if you have any  questions leave them down below in the comments

peace

you