What a great question! Joe from New Hampshire gave a gigantic clue to which attention must be granted. That clue is, "What is the purpose of the appraisal?"
One purpose is for refinance. It WILL come in high.
One may be for joint ownership buyout. It will come in low.
Another may be for what appears to be the granting of a mortgage. The reality, in this situation, is however quite different than the appearance on the surface. Let me explain.
The appraisal for a home purchase begins with the bank sending the order for the appraisal to an appraising company. Along with this order for the appraisal are the parameters the bank will impose to define what can be used as comparable. (When you set the RULES for the game you most certainly control the outcome.) So is the case with appraisals.
When the appraisal is returned to the bank, it goes before a review board to verify it conforms to these parameters. This review process is to assure the bank will be able to sell the mortgage to an investment group. They are assessing conformity to the investment group(s) purchase parameters. Does that sound familiar? The appraisal purpose is to resell the mortgage, NOT DETERMINE VALUE.
Now with 40 BILLION a month committed by the FEDS to buy real estate backed assets, we could see a real liberation of mortgage money. $40,000,000,000!
Add that to Blackstone launching a one billion dollar sfh purchase spree and you might see some frenetic buying again.
A prudent seller will need to understand the appraising reality and prepare accordingly. The real estate professionals need to know what the real value is, and they will also know what the appraisal will be when it pops out of the process. This means the real estate professionals will need to establish the true meaning of Fair Market Value, what a willing and able buyer and seller agree upon, rather than what the 'gamed' appraising process reflects.
In an eclectic community, a buyer who if financially tapped out, who can not increase down payment, would not be a good prospect for such a home since the appraised value will always be low and the seller should REQUIRE the buyer to bring a pile of cash to the closing table.
Home sellers need to start saying NO to this nonsense. Buyers need to get the message the fire sale is over regarding real estate in Florida.
Regarding your question, 'expected percentage from appraised market value" about +15 % in eclectic communities in Florida. All real estate is local, Consult with a professional in the community in which you are buying. If the local market has been rock solid during the past six years, it changes nothing, the appraisal process is the same and the unsuspecting seller takes it on the chin, again.
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL