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Sounds like the banks are now forcing house prices down even further. It just seems like a fear thing maybe they are deducting another 10% once they get to a fair appraisal just incase the home ends up in foreclosure. Is there any hope for the average homeowners in this day and age anymore? The only consolation is that you can go out and buy a home at a price you wouldn;t believe, so in my opinion if you really want to move house, sell sell sell and get into the buyers market soon.
Sounds like the banks are now forcing house prices down even further. It just seems like a fear thing maybe they are deducting another 10% once they get to a fair appraisal just incase the home ends up in foreclosure. Is there any hope for the average homeowners in this day and age anymore? The only consolation is that you can go out and buy a home at a price you wouldn;t believe, so in my opinion if you really want to move house, sell sell sell and get into the buyers market soon.
After all the debacle w/ banks - from loan denial, stock demise, bad investments, foreclosures, and the latest - raising interest rates on credit cards - I am starting to understand why my grandparents were so wary of banks.
It is pretty sad when someone has received fair offers on property and has a willing buyer, and the banks want low appraisals. I mean - it makes no sense to me. Seems to me - if the buyer has a decent downpayment and good credit - where is the risk? I understand the majority of homeowners have NOT defaulted on loans . . so why is everybody having to "pay the price" b/c BANKS made BAD LOANS to people who were HIGH RISK in the past?
I sure hope the OP has a buyer who works w/ a bank that looks at things on an individual basis.
DoubleBlessings: GOOD LUCK! Your home sounds like a really nice property!
I am an appraiser, but I obviously know nothing about your home or your situation.
You will never get dollar for dollar returns on improvements done on a home. Appraisers don't use $/SF in their reports, it's a line on the report, but it's an afterthought at best. It's not an accurate way to value a home. It only applies if you are dealing with very similar sized home, with very similar interiors, very similar lots, etc. Works well for the same model home in large subdivisions, but that's about it.
Larger homes will always sell for a lower $/sf than the smallest home does. If a home sells for 100/sf, an appraiser would never make a 50,000 adjustment when comparing a home that was 500 sf bigger or smaller. The adjustment would most likely be in the $30-40 range per sf difference.
Banks care more about the comps than they do what upgrades your home has in it. If the most recent sales (past 3 months) in your neighborhood sold in the 160-180k range, no way will your home ever appraise for 215k, I don't care what you did to the interior. A bank wouldn't accept a 50k adjustment on a 165k sale for condition of the interior. By definition, that's not a good comp if you are adjusting that much. If homes in your neighborhood aren't renovated, then perhaps you have over-improved your home for the neighborhood?
Bringing a home in 15% below purchase price tells me something is wrong somewhere. The comps will tell the story - if you have better ones, same age, close by, sold recently, then it would be good to have them handy. But look at the sales price, don't worry about the $/sf so much. It sounds like your home would warrant a condition adjustment, assuming the comps are not of similar quality, but on a 200k home, that adjustment just won't be more than about 10% at most.
If you have another offer, just take it and see what the next appraiser brings it in at. If 2 appraisers come in lower that purchase price, then it's time to sit down with your agent. Appraisers don't really enjoy coming in lower than a sales price - it creates headaches for us that most of us don't like to deal with, so there has to be some reason.
Good luck.
Banks really scrutinize appraisals these days, as they should every aspect of lending, but if the appraiser ignores comps that would justify a higher value, then they are not doing their job properly. I always try to select the best comps, cause you can't argue with that.
CAGMAN - I learned a lot from your post and really appreciate your taking time to help us understand a bit more about the process. Everything you said makes sense and gave me a new perspective on how an appraisal is done by a professional.
Really appreciate your sharing this with us.
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