What an appraiser produces is a number built on what genuinely comparable homes in your area actually closed at in the recent past.
What you think your home is worth is usually built on what it might have sold for a while ago, or what a neighbour listed at, or what somebody told you over a fence.
In a flat or rising market those two numbers sit close together and nobody notices. In the market we have had lately they can be a long way apart, and that gap is causing more headaches in Niagara right now than almost anything else I deal with.
This is the mistake I see cost people real money: there is still a lag in how people think about this market.
The thinking goes: prices are down, so I can buy something cheap. And then in the same breath: but my house is special, so I will still sell high. I understand why that feels true. It cannot be true.
If the market moved, it moved on both sides of your transaction. Your buy price and your sell price are correlated, because they are the same market. If you are getting a discount on the purchase, the person buying your house is getting one too. You do not get to have it in both directions.
I want to be fair here, because appraisers and realtors take a lot of heat for it. Nobody is doing anything wrong. The process becomes noisier when the market is moving.
Putting a number on a property is hard when the comparable sales are stale, when the last three similar homes on the street sold months apart at different price points, and when the market has moved dramatically between the offer and on closing day.
The scenario I have watched play out goes like this. Somebody gets a picture painted for them about what they will sell for. They take that number to their bank. The bank says fine, if you sell for that, you can buy for this. So they go out and buy, with a sale of property condition attached.
Then they can’t sell. At least not for the number everybody was planning around.
Now they are sitting in front of a house they have fallen in love with, and the plan does not work anymore. At the start of the process it was always “I will absolutely not buy without selling first.” But once emotion enters the picture it becomes “I will do whatever it takes to keep this house.”
Two moving pieces in a market like this means you need a plan for the version where it does not go smoothly, not just the version where it does.
That means being honest up front about the worst case. What happens if you sell for much less than you hoped? What if you can’t sell at all before closing? Are you willing to keep the property and rent it out for a while? Would bridge financing work? Could we refinance the existing home to fund the purchase?
Your bank can usually only show you the best case, because the other solutions are not in their toolkit. When they say no, that is a no from them. It is not a no from everyone. We have dozens of lenders and some of them look at exactly this scenario differently.
We also aren’t suggesting that the aggressive option is the right one. Sometimes the answer really is that you need to sell first. But you should know what the options are before you are emotionally committed, not after.
You either make up the difference with additional down payment, renegotiate the price with the seller, or in some cases move to a lender who looks at the property differently. Getting in front of it early gives you more of those options.
Sometimes. If the appraiser used comparables that genuinely do not match your property, that can be raised. It is not a quick process and it does not always change the outcome, so do not build your plan around it.
It depends entirely on whether you can carry both properties or have a financing solution if the sale is delayed. In a market with this much valuation uncertainty, I want that conversation to happen before you write the offer, not after.
It does, as long as you keep it. The risk is that people waive it under emotional pressure once they find a home they love. That is the exact moment to call someone who is not emotionally invested.
Usually the borrower, though some lenders cover it on certain products. It is one of the closing costs worth asking about early.
