"We're seeing a lot more sales," said Azam Khan, a real estate agent with Coldwell Banker Residential Brokerage in Baltimore. "I've got more and more people writing offers, offers being accepted."
A lot can go wrong before a sale closes, however.
Khan and other agents say the newest wrinkle is deals falling apart after the appraisals have come in lower than the contract price.
The National Association of Realtors blames this trend on a change in rules that affects appraisals for many mortgages - those that will be bought by financiers Fannie Mae and Freddie Mac.
The new Home Valuation Code of Conduct aims to defuse pressure to inflate appraisal values - a problem during the bubble - by preventing mortgage brokers, loan officers and real estate agents from selecting appraisers themselves. The National Association of Realtors released a survey this week showing that more than a third of agents say they have lost at least one sale since the code went into effect May 1. Appraisal management companies, which are increasingly handling the selection of appraisers, are assigning professionals to value homes in communities they're not familiar with, agents and appraisers said in the survey.
The Appraisal Institute, another industry trade group, criticizes some aspects of the code but doesn't appreciate the Realtors' argument that faulty appraisals are spiking home deals. And Ryan Hlubb, president of the institute's Maryland chapter, said he hasn't come across any deals that didn't close because the appraisal was lower than the contract price.
Prices that buyers and sellers are agreeing to have generally "been reflective of current conditions," said Hlubb, a principal with Hlubb Realty Advisors in Ellicott City.
But Khan said he had two deals unravel recently because the appraisals came in significantly lower than the contract sales price. "The buyers couldn't bring cash to settlement and the sellers couldn't reduce their price any more because they'd be upside down," he said.
First-time buyer Sean Browne, one of Khan's clients, made an offer on a Columbia townhouse last month and thought he and his wife would be moving in at the end of July. But then the appraisal pegged the value $19,000 below their $259,000 offer.
"We were all set on every part of our sale, including inspection," said Browne, who had looked at more than 70 homes and is convinced the contract price is a good deal. "We were all ready to go. We had started packing."
