Home Buyers Feel Crunch As Appraisal Prices Lag

The Arizona Republic reports that housing prices are speeding ahead of appraisals and the gap between sales price and appraised price are causing a growing number of home sales to fall through.

Most lenders will not finance anything above the amount of the homes appraisal, and if buyers can't come up with the extra funds, the deal usually falls apart. As a result of this situation, more sellers are listing homes with "not subject to appraisal" clauses. Buyers must then come up with the cash to close the deal, even if the house isn't appraised at the asking price.

Some appraisers are feeling pressure to make deals work. Appraisers are really caught between a rock and a hard place since if they don't do what lenders want they can be out of a job. In addition, the work load of appraisers has increased dramatically with the increase in the number of resales in the Valley. More...

There are now about 2,400 licensed Arizona appraisers, and 72,000 real estate agents.