Owners believe their homes are worth an average of 1.7 percent more than what appraisers say, according to the latest Quicken Loans National Home Price Perception Index. Appraiser and homeowner value opinions did narrow slightly in July for the first time in seven months. In June, consumers estimated their homes to be worth an average of 1.93 percent higher.
That schism could cause trouble for your next transaction.
“While a 1 or 2 percent difference in home value opinions may not seem like a lot, it could be enough to derail a mortgage,” says Bill Banfield, Quicken Loans executive vice president of capital markets. “A homeowner could be forced to bring more cash to closing in order to make a mortgage work if the appraisal is lower than expected... If owners are aware of their local markets it will lead to smoother mortgage transactions.”
The perceptions of home values between consumers and appraisers can vary drastically across the country. For example, in the Midwest and along the East Coast, homeowners tended to have higher expectations about the value of their home than appraisers’ opinions. However, in many Western markets, homeowners tended to underestimate the value of their home compared to appraisers’ opinions.
Source: Quicken Loans
