Read today’s top story: The trouble with appraisals: How the wild market is making it harder to get financing

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Re-Education

by Stephanie Sims

Stephanie Sims, Editor

Chicago Agent Managing Editor Stephanie Sims

As the market has started to recover, several “old” challenges that agents haven’t seen in a while have come up. Issues like multiple offers and making sure your buyer can win the bidding war; helping potential buyers obtain a loan when they do not have the greatest credit; and whether or not to use pocket listings are once again part of the buying and selling process.

Are there better strategies for handling these issues now?

It might not seem like there would be much of a difference between these challenges then and now, but today, after buyers and sellers are used to the recession’s market, it’s time to start reeducating them about what today’s market holds.

For instance, many buyers aren’t prepared and might even be shocked to learn their offer is one of several – and they could miss out on buying that home unless they strategize to win in that multiple offer situation. Teresa Stultz of Premier Living Properties in South Elgin told us she often has to prepare her buyers that this could happen, yet they are still shocked when it happens to them. Prepare your buyers for everything – not just pre-approval for loans anymore, but more situations, as well!

Appraisals are still big issues, too. Besides the agents featured in this issue, appraisals have been among the top complaints of every agent I have spoken to. These issues stem from appraisers “overcorrecting” to help curb loan officers from influencing the appraisal process. In theory, it seemed okay: the loan officer maintains no contact with the appraiser, and therefore, no questionable appraisers and no running up of housing prices.

But one important part was missing – the new rules abolished what are known as positive time adjustments. These are adjustment that an appraiser makes to account for a possible discrepancy in time between the property being appraised and its comps. When a home is being sold, if a comp matches the property almost perfectly, but was sold six months ago, if the market has appreciated, the appraiser should make a positive time adjustment, factoring in the market appreciation…but with positive time adjustments no longer allowed, now they can’t. In addition, there are often several buyers bidding and willing to pay over a home’s list price, yet the appraisal will still come in low because of the comps. When will appraisals and the value the buyers think the home is worth not be on opposite ends of the spectrum?

What do you think about the “new” market today? What are your challenges? Anything different than what we talk about in detail in our cover story? Email me at stephanie@chicago.staging312.com and let me know what you think of this issue.

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