May is one of the busiest months of the year in the real estate market, and once again, and the lack of inventory and buyer demand can increase selling prices at a pace faster than the appraisers can substantiate.   Because buyer demand is so high, many sellers are asking for prices higher than the appraisals can substantiate. Some of the buyers have been waiting for the perfect home for a while and they are willing to pay more to get what they want. 

If a buyer is paying cash, there is no appraisal, but if a there is financing the lender will determine how much they are willing to loan. For example; if the purchase price is for $300,000 and the property appraises for the purchase price and the buyer is putting 10% down, the buyer will pay $30,000 and the loan will be $270,000. If the property only appraises for $290,000, the down payment is $29,000 and the loan will be $261,000. That leaves a $10,000 shortage, that the buyer may or may not be able to cover. The listing agent may challenge the appraisal and may be successful in getting an increase, or the buyer may be able to cover all or part of the shortage, but if not, the seller must decide to either lower the price to match the appraisal or look for a new buyer and hope for a better appraisal.

According to the Multiple Listing Service (MLS), the number of new listings for March in Chisago County was 75 with 68 Sales. In April there were 150 new Listings with 107 Sales. Through May 24th there were 135 new listings and 107 listings under contract. 

Not all homes sell quickly and there is some older inventory on the market, bringing the total Active listings in the County to 249, 49 of which are under contract, and 75 of the Active listings are new construction homes, which are more expensive than pre-existing homes of the same type.

In the Chisago Lakes School District there are no single family that qualify for FHA or DVA financing under $200,000. The first-time home buyer market has been hit hard with the lack of inventory and increase in prices. 

There are currently no available Active listings on the MLS on the large Chisago Lakes priced between $269,900 and $800,000, other than new construction, which are on less desirable lake lots. Lake homes are moving so fast that many of them are sold before they go onto the MLS.

An experienced real estate agent can provide you with a market analysis to see what is happening on the Active market verses the Sold market to sell your home for the highest price in the shortest time period.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.