From the Star Ledger:
More homes are under-appraising in this quick-changing market for two reasons, he said. “The first being there are no comparable sales to support the purchase price. Secondly, there are a ton of homes under contract that have not closed yet therefore the increase in some home prices are not accurately reflected until the comps actually close.”
James Hughes, a broker-salesman with Compass in Montclair, said his clients are typically offering to bridge the appraisal gap to a set point – $10,000, $20,000 or even $50,000.