Skip to main content

High Demand, Low Inventory, Multiple Offers on Homes: How They Can Effect a Chicagoland Appraisal

High Demand, Low Inventory, 
Multiple Offers on Homes: 
How They Can Effect a Chicagoland Appraisal     


     Media Reports regarding the somewhat limited inventory of homes currently for sale within Chicagoland housing markets are certainly supported by a large portion of my mortgage clients' personal recounts. Many say they've found a smaller selection of homes for viewing and consideration ...

     For Chicagoland Sellers that have priced their homes wisely and correctly, that limited supply of homes translates into greater demand and possibly ... even multiple, competing offers received on their home. Sometimes, offers fairly aggressively priced too.

     Now Home Sellers receiving multiple high offers is a good thing, right?  Well ... yes and no.

     Why would I say no?  Or ... think there is any negative to a Seller receiving a higher offer?

     Well, in some cases, Home Buyers are making (and Sellers are accepting) offers higher than the Sales Prices on the most recently sold homes in the area. Homes that will likely be considered as "Comparables" during the Appraisal portion of the new Home Buyer's financing process.

     That disconnect between current Sale Price and Comparables' Sale Prices can result in a very real challenge for Appraisers trying to determine an "Estimated Value" for the new Home Buyer's Appraisal. A challenge that may cause issues during the financing of the property.

     Other additional issues may also contribute to the challenges an Appraiser faces with these higher-priced properties. WHEN the sale occurs and WHEN
 an Appraisal is being conducted can be vitally important to the Appraisal process too ... and its outcome. 

     Here's an example of what I mean:

     In the Chicagoland area, we recently came out of the winter housing market ... typically a slower time for housing sales in our area. That "winter effect" can have ramifications on sales and sales prices conducted during that time period.

     Real Estate Appraisers typically look to and consider the prior 6 months for housing sales data when performing their current assignment.  As I'm writing this in June of 2016, the "oldest" comparable sales typically considered in the majority of Appraisals would be those sales closed in December of 2015.

     Especially in housing markets experiencing seasonal climate change (like the Chicagoland area), there can be small but subtle market condition variables influencing home Sales Prices during any season. Experienced, knowledgeable Appraisers consider these subtle, but obvious, market conditions when conducting their Appraisals.

     How? And where do those small, subtle market conditions (and others) get addressed within an Appraisal Report?

     Appraisers can note and address these conditions within the narrative portion of their Appraisal Report ... and should ...

     Especially in those transactions where large differences between Comparable Sales and Subject Property Sales Price exist.

     For Agents representing Chicagoland clients, either in the sale or purchase of such a property, they must be aware that these challenges exist for Appraisers (and Lender's Underwriter too).

     As a result of the lower inventory and rising prices in our area, I've recently seen a mixed bag of outcomes from Appraisers and Underwriters in situations such as these. So any Comparables provided by Agent to Appraiser need to address and fully support the higher Sales Price of a Chicagoland home ... and ultimately substantiate, satisfy, and answer all an Underwriter's concerns regarding the higher price.

     Today's reality is: Addressing Underwriters' concerns can be an uphill battle.

     Agents proactively prepared to meet and exceed those challenges with supporting facts and comparable sales will be most successful in accomplishing this feat. But Appraisers must remain open-minded to accepting, considering, and utilizing information provided them ...

     * Hoping to Buy or Refinance a home in Chicago or elsewhere in the Chicagoland area? Contact me! I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

Gene Mundt, Mortgage Originator, an Originator with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Referrals are Welcomed! 












Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...

“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.


Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?

These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:

Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…