That’s right! One of the dominant trends in the Miami real estate market is that buyers are willing to pay more than the appraised value for their new homes. You will notice this trend more in areas like Palm Beach, Kendall, North Bay Road and Miami Beach. The top reasons for buyers paying more than the appraised value are:
There Isn’t Enough Appraised Homes
After the economic downslide several homeowners had to lose their houses to foreclosures and several had to declare themselves bankrupt. This financial crisis saw them being blacklisted by the leading banks. As a new buyer you would never want to buy a property that has been blacklisted by the bank since you will not get enough financial aid for it. This increased number of foreclosures and bankruptcy left very few good homes in the market. The demand for appraised houses is on the rise therefore and this is making the owners of appraised houses ask for prices higher than the appraised amount. This along with several projects for new Miami condos, being closed for lack of finances, has caused a shortage of appraised houses in the city.
Competition From Other Buyers And Investors
With the real estate market looking up and prices of property rising, people are starting to buy property and homes before the prices rise any further. There are a large number of potential buyers and investors in the market, but the number luxury condos like Apogee Miami apartments are less than that. This scenario follows the basic economic policy of greater demand and limited supply and hence the homeowners are in a position to ask for prices higher than the appraised value of the property and the buyers won’t think twice before signing the deal. Buyers feel that if the get a great home and are asked a price higher than the appraised amount, they are not in a position to check out other houses since another buyer may just accept the asked price and they would lose the house.
Low Rate Of Interest
When the seller asks for a price higher than the appraised value, buyers have to cover that difference by paying the amount on their own as banks will not pay more than the appraised amount for a property. This seems like a bad decision because the buyer will have to start paying back the interest and also end up losing a chunk of money by paying the difference. However, since the banks have very low interest rates to favour investment in the real estate market, this problem is avoidable. This makes sealing a deal on a great house at a greater price a good decision.
If you are in a position to pay the difference in the amount on your own and have found a house that you would want to buy, then read through the paper work, consult your real estate agent and sign the deal.