Realtor: Appraisals key



  • Guest column.
  • Dan Polimino on appraisals.
  • Low appraisals can be deal killers

By Dan Polimino

Special to

Dan Polimino

Dan Polimino

In a seller’s market, most people putting their homes on the market want a premium price and chances are they can get it.

During the past three months, we have visited many sellers who were thinking about putting their homes on the market.

Most of them asked this one simple question, “What is the top dollar for our home?”

We answer that question based on the comparable sales data we have researched in the neighborhood and its surrounding area.

Some prospective sellers take the number we give them and added anywhere from $10,000 to $100,000 more to the asking price.

They believe that given the low inventory, buyers will pay their asking price.

In some cases, they are correct; a buyer will pay the higher price.

But will it appraise for that price?

That’s probably the biggest challenge happening right now in the real estate business.

Our team is closing 10 to 12 transactions a month for both buyers and sellers. In those transactions, we can count on at least one of those deals not appraising.

That’s not to say the house is not worth it, but what it does say is that appraisals are a problem.

This is America and you can ask whatever you want for your home.

The problem is when the buyer is getting a loan, and 90 percent are getting loans, you had better make sure that you have good comparable sales data to justify your price.

Every lender in the U.S. wants to make sure that they are not overpaying for your home.

We try very hard to advise our sellers on not only how much they can ask for their home, but also on how much there home will appraise for.

Not all of our clients take our advice.

When that happens and the home does not appraise for the purchase price, there are serious ramifications.

In most cases, the deal falls apart and the home gets back on the market, sometimes at a lower price.

This hurts everyone involved including the buyer, the seller, and the agents.

You see, the market is moving so fast upwards that the appraisers are having a hard time keeping up with the current pricing.

In some cases, we see appraisers three months behind the market. Not all of the blame falls on the appraisers.

Sometimes the appraisers are right on the mark with their analysis, but an underwriter rejects their appraisal.

For example, some banks have their underwriting departments in other states and those underwriters in that particular state, say, Minnesota, do not know or understand what’s happening in Denver. As such, they don’t believe the appraisals that come in at purchase price and then ask for an appraisal review or a second appraisal.

This holds up the entire process and in some cases kills the deal entirely.

The moral of the story is simple … we know everyone wants the highest price for their home. To accomplish this, just make sure that you have the comparable sales data to back it up or you may find that you cost yourself more time, money and aggravation than you planned on.

Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact Dan at or

Have a story idea or real estate tip? Contact John Rebchook at is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.



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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for, covering commercial real estate for the Internet publication.

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