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Are low appraisals slowing US home sales?

Laurent Belsie The Christian Science Monitor
A for sale sign hung in front of a Homestead, Fla., home in March. Some real estate agents complain that unfairly low appraisals are scotching deals to buy homes. (J. Pat Carter/AP/File)

A for sale sign hung in front of a Homestead, Fla., home in March. Some real estate agents complain that unfairly low appraisals are scotching deals to buy homes. (J. Pat Carter/AP/File)


If it’s a buyer’s market in real estate, how come so many Americans are having trouble closing on a home?



One big factor is appraisals. Under tough new rules instituted in May, estimates of home values are coming in so low that deals are falling through. Often, sellers aren’t willing to sell for such prices. Even when sellers and buyers do settle on a price, appraisals sometimes come in too low to support the value and lenders won’t finance the deal.

“There’s definitely a groundswell of frustration that’s building right now,” said Lawrence Yun, chief economist of the National Association of Realtors, in a telephone interview. In the past month, the NAR has received hundreds of calls and many more emails from agents who have had appraisals torpedo deals. “We don’t know if this is a major issue or a minor bump. But … this is just highly unusual the level of [complaints] that we are receiving.”


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