Buying and Selling Boston Luxury Condos: The Crucial Importance of a Solid Appraisal
In the Boston real estate market today, pending home sales are beginning to demonstrate an improvement in the marketplace. This includes the sales of Boston luxury condos. However, one problem area has been detected when it comes to pending residential sales in the Boston real estate market – as well as in other locales in the state and throughout the country for that matter.
In some instances, Boston real estate sales contracts are falling apart – including those involving Boston luxury condos – because the valuations associated with these properties are ending up not supporting the ultimate sales price. Some analysts are contending that there has been an increase in the number of faulty appraisals associated with Boston real estate.
The problem with some appraisals lies in the disparity between comparable valuations in neighborhoods in which there have been a high number of distressed sales. In other words, lenders will be looking at these comparable valuations – sales of similar residences in a neighborhood. The lenders include distressed sales into this computation. Not only is this effecting the valuation of single family residences but is impacting the appraisal of Boston luxury condos as well.
On the other hand, to a Boston real estate agent or broker, if a person is willing to pay a higher price for a particular residence, for a particular Boston luxury condo, that is the value in the mind of that professional.
The challenge for appraisers in this day and age is to consider all of these factors in coming up with the most accurate valuation of a specific pieces Boston real estate, including Boston luxury condos. This requires balancing the lower prices paid on otherwise comparable distressed property with the value of a specific piece of Boston real estate in the eyes of a potential, specific buyer.
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