Long Beach Island Real Estate Appraisal Differences
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Appraisal Gaps in the LBI Real Estate Market 
Appraisal Gaps in the LBI Real Estate Market 
Appraisal Gaps in the LBI Real Estate Market
Long Beach Island Real Estate and Appraisals
The LBI real estate market has seen significant changes in the past year and a half. COVID increased what was already a robust real estate market and has caused prices to rise. The substantial rise in prices in such a short time period has caused some challenges with appraisals in the LBI real estate market. In the past, appraisals were usually not an issue, but more and more, we see some disparity between the sales price and the appraised value of a home. There are three main reasons for this, and they are:
- Some appraisers are using outdated comparable sales from Long Beach Island
- Some appraisers are not from the area and are not assigning proper adjustments for differences between subjects and comparables
- Some buyers are willing to “overpay” in the market, which can skew appraisals and sales prices
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Appraisal Gaps in the LBI Real Estate Market
One of the biggest challenges facing appraisals in the LBI real estate market is the use of outdated information. While most appraisers tend to stay within a six-month sales window, some will go back a year or more. This can make it very challenging to assign the property adjustment for market appreciation. Some local appraisers use between 2% and 4% each month when adjusting sales prices. If the proper adjustments are not made, it is easy to undervalue a home based on outdated sales. While there are many excellent appraisers who are familiar with the Long Beach Island real estate market, some do not understand the subtle differences in our market. For example, some appraisers assign almost no value difference between a home on the oceanside and a home on the bayside. In the LBI real estate market, this one small difference can translate to a significant variation in price. Real estate is local, and that is true for real estate agents and real estate appraisers. Buyers and sellers should always work with local professionals whenever possible who understand the local market. Lastly, some appraisal differences simply cannot be overcome. The LBI real estate market is competitive right now, and some buyers are willing to pay a premium to purchase a home. A buyer in the Long Beach Island real estate market should always try to avoid overpaying for a home. However, some buyers will willingly overpay to ensure they win a bid. Any buyer in the LBI real estate market should review an appraisal to see if the difference between the appraised value and the sales price is due to overpaying or due to one of the other reasons cited above. If the difference is due to overpaying, there may be an opportunity to renegotiate the sales price.
Long Beach Island Real Estate Appraisal Differences
All buyers and sellers in the LBI real estate market should understand that if there is a difference between the appraised value of a home and the sales price, there may be an issue with financing. For example, there are ways to address this, such as reducing the sales price, challenging the appraisal, or having the buyer bring more money to the closing table. If there is a Long Beach Island real estate appraisal difference, buyers and sellers should understand why and what may be done to correct it. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer |LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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