Appraisals coming in low on a purchase transaction are becoming more common throughout the Austin area. This is actually a good thing as it is a function of being in a market with increasing property value. If you look at the way HVCC has set up the appraisal process, the only way you can have an increase in property value is to have buyers paying above the appraised value.
As with most of the issues that we navigate in the real estate industry, it is simply a matter of us creating the correct buyer expectations. Buyers need to realize that an appraisal is base on historical data. In a competitive market like Austin, with its limited inventory and strong demand, if you are looking at a good property in a good area there will probably be multiple offers and the free market will decide what the real value of the property is at the time the purchase contract is accepted.
I think buyers just need to realize they may need to pay a premium above the historical value of a property to acquire a property that is highly desirable. Buyers should take solace in the fact that all indicators point to this trend continuing for the foreseeable future, so in reality they are not taking a loss on their purchase.
I know this is a frustuating issue inside of a particular transaction, but hopefully this will help to shed a positive light on this issue. We are very lucky to be in the strongest real estate market in the country.