Appraisal issues in a sharply appreciating market

[Stone Saathoff]

This is a question for seasoned flippers and agents out there.

Lately, in my market (San Antonio, TX) I have been seeing flippers (my clients and others) getting well above the projected ARV on their flip projects due to the shortage of inventory we have right now, however, appraisals have been coming in significantly below the contracted sales price due to comparables not being as high.

What can the flipper or list agent do in these types of situations to prepare the buyer and have a better chance of keeping the sale together?

I would imagine some sort of discussion about setting the right expectation about appraisals coming back below the purchase price, but I'm at a bit of a loss here to being able to resolve this.

Should agents be talking to buyers and making sure they have the funds available to cover a higher down payment before letting them put the house under contract?