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Relative is selling their house and before putting it up for sale had it appraised by an independent fee appraiser. They came in at $382k. 4 Realtors said to list it at $385k - no higher. They were approached by a buyer going VA and agreed on a price of $395k. Less than 40 days after receiving the regular appraisal, the VA appraiser came in at.... wait for it.... $395k. No new sales in area.
That's a difference of less than 3%, which is considered acceptable when comparing appraisals. Appraising is not a black and white, not "this is how it must be"....but, an opinion of value and how that opinion was formed.
An appraiser does review the purchase contract and if it's within their methodology to support that sales price, they will. But they won't toss their process to make the deal work. Most appraisers I know will look good and hard before bringing in a low appraisal. But there are some contracts that are just plain, " ah hell no" when they are received, and the appraiser knows the area and knows it just is not happening. In the dark ages, if I sent such an order in (an ah hell no) to this one appraiser, I would invariably get the call asking what is everyone smoking before even scheduling the appointment. Lol, looking back, I think it was his schedule the appraiser was protecting, knowing it would be appeal after appeal before the fork would be put in the deal. That was how I knew a low one was in the works.
That's a difference of less than 3%, which is considered acceptable when comparing appraisals. Appraising is not a black and white, not "this is how it must be"....but, an opinion of value and how that opinion was formed.
An appraiser does review the purchase contract and if it's within their methodology to support that sales price, they will. But they won't toss their process to make the deal work. Most appraisers I know will look good and hard before bringing in a low appraisal. But there are some contracts that are just plain, " ah hell no" when they are received, and the appraiser knows the area and knows it just is not happening. In the dark ages, if I sent such an order in (an ah hell no) to this one appraiser, I would invariably get the call asking what is everyone smoking before even scheduling the appointment. Lol, looking back, I think it was his schedule the appraiser was protecting, knowing it would be appeal after appeal before the fork would be put in the deal. That was how I knew a low one was in the works.
BINGO
Hard to believe the OP is in disbelief over a difference of 3%.
An appraisal is subjective- it's not cut in stone. You've got a 3.5% +/_ difference in value. It doesn't mean much.
Example, relocation companies have two regular appraisals done on a home, plus a real estate broker's opinion of value. They are looking for price spreads of those three values within 5% of each other to base their buyout figure.
No one is expecting identical values, that would be unusual.
An appraisal is subjective but based on comparables - isn't it? So is the appraiser smarter than all the agents who wanted to list it at $385k? If he didn't know what the contract price was - do you think he would have come in at $395k?
An appraisal is subjective but based on comparables - isn't it? So is the appraiser smarter than all the agents who wanted to list it at $385k? If he didn't know what the contract price was - do you think he would have come in at $395k?
It's a VA loan with taxpayers on the hook.
Most agents realize that a lower list price means a quicker sale.
As far as the appraiser knowing the contract price....maybe and maybe not. But a contract offer is an action of the market and law requires that the appraiser must make every reasonable attempt to verify and analyze pending offers and contracts.
Also, you are making the assumption that the first appraisal was more accurate than the second. Why is that?
Most agents realize that a lower list price means a quicker sale.
A list price 13k lower than the appraiser came in at and the buyer offered?
Quote:
As far as the appraiser knowing the contract price....maybe and maybe not. But a contract offer is an action of the market and law requires that the appraiser must make every reasonable attempt to verify and analyze pending offers and contracts.
you contradicted yourself in the same sentence -- and they knew the contract price - said so in the statement of value.
Quote:
Also, you are making the assumption that the first appraisal was more accurate than the second. Why is that?
why wouldn't I ? I read the first appraisal and saw the comps.
A list price 13k lower than the appraiser came in at and the buyer offered? (!)
you contradicted yourself in the same sentence -- and they knew the contract price - said so in the statement of value. (2)
why wouldn't I ? I read the first appraisal and saw the comps.(3)
(1) of course, assuming the suggest list price was before the VA financed offer
(2) You said "If he didn't know what the contract price was - do you think he would have come in at $395k?" I was merely answering your question regarding the appraiser coming in at the contracted value.
(3) And you agree with the reasoning and analysis? You are qualified to estimate and apply appropriate adjustments, etc.?
If you know so much about appraisals, maybe you should've just offered to do the appraisal yourself. Wonder how that would work out for you?
Bottom line - a 3% difference in appraisal values is within a normal range. You "seeing" the comps means nothing since you are not an appraiser.
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