Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Real estate agent does not have a clue how to value improvements.
Improvements do not equal dollar for dollar value in the market. Drapes are personal property- the appraiser doesn't include them. Appraisers don't include door locks. The roof and A/C are several years old and no longer new, etc.
Next time you make an offer, both you & your buyer's agent try to make a better estimate of what the home might be worth in the market, not what the seller thinks the home is worth. Good luck.
The sellers agent should know how to dispute appraisal. The agent will need to provide comps justifying the sale price. If they can't then the seller could lower price to appraised value, buyer could pay appraised price, split it, or terminate contract with return of earnest money.
....I should have known the red flags--seller was the "guide" for the showing, there for the inspection, provided a list of all her upgrades and improvements over the years and valued those at 80,000. Items included in that list were "front door locks", interior paint, tile flooring, replace AC 2009, Roof 2009, custom curtains" etc. She made comments during the showing that "if it doesn't sell, oh well...ill just snowbird" She is very emotionally attached. I should have followed my gut..."
Apparently neither the seller or her realtor (or you) understand the concept of 'added value' versus normal wear and tear and home maintenance! (In fact, replacing the roof and A/C 8-years ago, means you are at least 50-60+-percent into the useful life; while paint, door locks, curtains are expected, not "upgrades").
If you really want the house and the seller is unwilling to move on the price, tell them the only way you will pay above the current appraised price is if THEY get and pay for another higher appraisal.
Perhaps you can also have your mortgage appraiser speak with the seller/realtor about 'appraised value' (versus the normal home ownership costs she is considering added value ... paint, locks, curtains ...??). You might also ask the RE broker to speak with his realtor and the owner about how appraisals and comps work. (You do realize that the bank is not going to finance this home above the appraised value, don't you?)
Did you perhaps evaluate the home values in this new area, based on another RE market? Do YOU understand how home values, comps and appraisals work? (Question based on your statement that you "LOST" $90K on the sale of your current home??).
BUT, even if the OP gets a new lender and new appraisal that still doesn't mean the appraisal would come back higher; therefore, costing the OP more time and money paying for such. Plus....it would be another pull to the OP's credit! NO way are the "improvements" mentioned worth $80K and the roof and A/C are now 8 years old, so not exactly new. This seller is in denial and has a crappy realtor at that!
OP, find a new house!
Probably true, but then why did OP initially agree to that price? If those things were that obvious they should have seen this coming (or better yet not offer that price to begin with), yet OP said their agent is "blown away" and they thought it would appraise maybe $5k less.
It's not like the seller is really being incredibly stubborn if they've offered to reduce it by $12,500 to $255K.
Homes are worth what they appraise for not what you pour into them.
Since Seller isn't motivated, there are other homes, walk away, let somebody else over pay.
Appraisers aren't gods, sometimes they're wrong. If the seller, her agent, the buyers and their agent are all truly "surprised" by the appraisal, it may well be wrong. The buyers are the ones who have presumably looked at all of the comparables themselves and picked the best one. Appraisers work old "comps" based on listing images and driving past. Would you buy a house based solely on the listing info in MLS and driving past? (Appraisers can't tour closed sales for themselves). That's assuming the appraiser is even competent in the neighborhood. Many aren't.
BUT, even if the OP gets a new lender and new appraisal that still doesn't mean the appraisal would come back higher; therefore, costing the OP more time and money paying for such. Plus....it would be another pull to the OP's credit! NO way are the "improvements" mentioned worth $80K and the roof and A/C are now 8 years old, so not exactly new. This seller is in denial and has a crappy realtor at that!
OP, find a new house!
I will take bold highlighted words over all capital letters any day.....but just barely!
I should have known the red flags--seller was the "guide" for the showing, there for the inspection, provided a list of all her upgrades and improvements over the years and valued those at 80,000. Items included in that list were "front door locks", interior paint, tile flooring, replace AC 2009, Roof 2009, custom curtains" etc. She made comments during the showing that "if it doesn't sell, oh well...ill just snowbird" She is very emotionally attached. I should have followed my gut.
Yep. Sellers who want to sell work with you when an appraisal comes back lower
She doesn't want to sell. The appraisal has given her an out. Take her up on it
On our househunt last year, I can't even tell you the number of older people who were not emotionally ready to sell. At all.
Under contract for a super clean meticulous house. We figured the appraisal would come back about 5- grand lower than contract price but were never expected 37,500! Seller and her agent are mad, my agent is blown away. House was 267,500 and appraisal came back at 230,000. The comps were good-no mistakes in the report. Both agents agree the comps were fair they just felt the appraiser didn't "value" her interior as well since she has such a spotless home with impeccable maintenance.
Seller wants us to change lenders and get 2nd appraisal. Then she offered to lower her price by 12,000 (255,000) and wants us to come up with the difference. We don't have it and even if I did I'm not sure I would do it.
I don't think even if we went through the trouble of getting a new lender how could a second appraisal come in 37,500 higher?
I should have known the red flags--seller was the "guide" for the showing, there for the inspection, provided a list of all her upgrades and improvements over the years and valued those at 80,000. Items included in that list were "front door locks", interior paint, tile flooring, replace AC 2009, Roof 2009, custom curtains" etc. She made comments during the showing that "if it doesn't sell, oh well...ill just snowbird" She is very emotionally attached. I should have followed my gut.
I get her anger and frustration. We just sold our home at a 90,000 dollar loss. I know what it's like to think your home has value and to be told it doesn't appraise for what you wanted. Her house is in boxes. I'm bummed that we went through the whole process and got excited thinking our search was over and our life could settle down again.
We offered to pay 10,000 more but her first response to the appraisal was .."well I'm not just going to give my house away" so I know the deal is dead. If the gap wasn't so big I'm sure we could have managed to make it work somehow.
Buying and selling can really suck.
Blame the buyers agent for not preparing the buyer for a realistic appraisal. Did the buyers agent not do a market analysis before an offer was made?
If the seller won't come down and the buyer won't come up - you will have to find another house.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
