In today’s Ruidoso real estate market, low inventory and high demand are driving up the prices on homes $$$. Nationally many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors. Locally though in Lincoln County, New Mexico our percentage is much lower at closer to 11%. While this is great news for sellers everywhere, it can be tricky to say the least to navigate if the price of your contract doesn’t match up with the appraisal for the house. It’s called an appraisal gap, and it’s happening more and more in today’s real estate market. 
The chart seen uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a house sale in May of this year compared to May of 2020. If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the house. That can spell TROUBLE for both parties involved.
In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.
Whether you’re buying or selling, let’s connect so you have an ally throughout the process to help you navigate the unexpected, including appraisal gaps.
