Do appraisers really set the value for homes? You bet!

I recently wrote about sellers in a declining real estate market who can't bring themselves to lower the prices on their homes. The result is a decline in the number of homes being sold and a glut of overpriced real estate languishing on the market.

In an email, WalletPop reader Elfi Starrett, a Florida Realtor, told me how difficult it is for many sellers to face up to the realities of a changing market:

"I have turned down a couple of listings because the sellers were unwilling to deal with the current facts of the market. They listed with someone else for too high a price, the properties languished and have now been withdrawn presumably to wait for an improved market. I have found my best argument to price the property correctly is to make sure the seller knows that the property is going to be appraised by the lender and that they can ask anything they want to, but in the end, unless it is a cash deal, the price is going to be decided by the mortgage company." (emphasis added)

So there you go. Even if you're able to find a sucker for your overpriced house, you might not be able to close the deal if the property doesn't appraise -- and people buying properties for more than they're worth tend not to have the means to shell out extra cash at closing to make up for a weak appraisal.

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