New home prices in OKC are outpacing appraisals and purchase contracts. If buyers and developers can’t come to terms and fill the financing gap, they’ll be forced to break the contract.
How has this appraisal gap happened?
In the current economic climate, scarce labor and hard-to-get materials are pushing up the cost of homes for buyers, making the home prices too expensive for some deals to close.
Construction costs have been on the rise for a number of different reasons. Lumber and labor, for example, rose so quickly that the cost of building the same house in the same neighborhood could change by thousands of dollars from one week to the next.
What happens when there’s an appraisal gap?
Three main things can happen when there’s an appraisal gap.
- The buyer can agree to pay the price difference when the home closes.
- The seller of the home can lower the home price to match the appraisal price.
- The deal can not go through and the buyer and seller part ways and break the contract.
