"What is commonplace now is for buyers to remove that contingency, meaning you can't renegotiate with the seller because you don't have a right to walk away anymore," he said."The problem with this is, we're not missing appraisals by $10,000 — we're missing appraisals by $50,000, by $75,000, by $90,000."
And when an appraisal falls short of the sale price, the buyer is on the hook to come up with the extra money. That means buyers are having to bring a significant amount of cash to the table, both for a healthy down payment and in case they need to bridge the gap between the appraisal price and the contract price, Waeiss said.
Pope-Handy said she recently had a client buy a house in the San Jose area that appraised at $55,000 less than the contract price.Prospective buyers visit an open house in West Hempstead, New York.Waeiss said the Austin market has been impacted by the migration of tech workers outside of states like California and New York during the pandemic. Some of those buyers have sold off million-dollar homes in other states, setting them up to buy larger and more high-end homes in Austin.
But there's another subset of buyers who are affecting the local market, Waeiss said: Buyers who don't necessarily make"a crazy amount of money," but do have a significant chunk of equity in companies like Facebook, Apple, or Google. Those buyers are able to either liquidate shares or borrow against their stock in order to put hefty down payments on homes in the region.
"They can't afford it because they're not cash-rich," he added."They could probably afford the monthly payment. They have good income. They have a good nest egg. But it's not enough."Subscribe to push notificationsSign up for the Business Insider newsletter - a daily selection of our best stories curated just for you.
So, it means real estate is booming.
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