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Old 09-19-2008, 02:25 AM
 
6 posts, read 19,846 times
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We're under contract to buy a older (73) home in Plano. Our appraisal came in $14,000 under our sales price. We were pretty willing to negotiate with the sellers on the price but now this has dragged on for several days and we're getting weary. The seller's agents have also been a little pushy, asking if we would consider another lender. I have a great rate with a lender I've used for 4 other mortgages, why should I use another lender and pay more! They have also contacted my lender and been pushy with our loan processor and wanted to contact the appraiser.

We really like the house, but there are still some items that need repair or updating, so I don't want to overpay and then invest even more money only to be in the hole.

Does this all seem a little strange or are we overreacting? Last night we were ready to call it off because it's just become a little to strange, but I do like the house.

Has anyone else had appraisals come in this much lower? Also, our contract price is $263,000 and the appraisal was $249,000.

Thanks for any help.
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Old 09-19-2008, 08:24 AM
 
37,315 posts, read 59,697,706 times
Reputation: 25340
think the appraisers have gotten rapped for over-valuing some of the homes that turned into bad loans--and lenders are putting the screws on them NOT to over-inflate...

14K seems like quite a bit of undervaluation to me (but I am only shopper for home--not real estate agent or mortgage lender)...

did the appraisal give a reason like foundation problem or bad roof for why the appraisal was low

when we moved the last time (years ago)--it was company sponsored from Shreveport to DFW area....they got two appraisals for home valuation for buy-out offer...ours came in low for what we thought and lower...but the market in Shreveport was going sour...
we asked for a 3rd because there was more than a 5K discrepancy between the two--3rd came in significantly higher--he paid more attention to building details like the molding the buider used...so the buy-out price was higher...

would you consider having a s second appraisal...have they suggested that---
would YOUR mortgage company go for it?

I would say that they should bear the cost of the appraisal but YOU would get to pick who would do it....
depending on that appraisal maybe they would agree to split the difference...
I do think that is significant number--but HOW the appraiser reached it is what I would want clarified....
did he also use comps that maybe their real estate agent ignored in making their sale price....like a foreclosed property with under market pricing...

is there a physical problem that has not been disclosed beyond just being an older home/dated appliances and such
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Old 09-19-2008, 08:28 AM
 
Location: West, Southwest, East & Northeast
3,463 posts, read 7,295,127 times
Reputation: 871
My opinion is to stand firm with your lender and leave the appraising to "your" lender's appraiser. Appraisers are under far more scrutiny nowadays than in past years to fairly value property. My guess is that the seller's agent is yrying to convince you to use a different lender in "hopes" that the new lender's appraiser will value the property higher. Stand firm. If the seller comes down to your lender's appraised value, then great. However, if that does not happen - you certainly don't want to overpay do you? If it's meant to work out - it will. And if it's not meant to work out, it won't...
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Old 09-19-2008, 01:29 PM
 
Location: Dallas/Fort Worth, Texas
4,207 posts, read 15,226,959 times
Reputation: 2720
It happens that appraisals come in lower than sales price but it's rare. How did you come up with the offer amount? Did your Realtor show you comparables?

If the above was done and it really should be worth 249K, I think you should stand firm and not overpay for the house, especially in this market.

Their next buyer will run into the same problem, so it's in their best interest to work with you.

Naima
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Old 09-19-2008, 02:20 PM
 
Location: Austin
7,244 posts, read 21,757,022 times
Reputation: 10014
Has your Realtor or the listing Realtor given comps to the appraiser to see what he/she thinks of them? Many times, lenders send out an appraiser who doesn't usually work that particular area, and they're not aware of things in that area. Tarrant county appraisers should not be used in Dallas and Collin Counties, and vice verse. The markets are very different.

If your Realtor ran comps and you see the value of why you offered the higher price, I think another appraiser should be sent out, or the current appraiser should re-evaluate with comps given to him by the agents to see if he can use those... and other than that, you should not pay more than an appraisal. If the seller won't reduce the price, when/if they get another buyer, that buyers' appraiser is going to be able to see the first appraisal in a main appraisal system and the seller is still not going to get a higher price.

You really need to be working with your agent on getting some comps to the appraiser and demand some answers. The buyers paid for the appraiser, they have the right to speak directly to the appraiser. I work Plano a lot, and there haven't been many appraisal issues that I've seen.
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Old 09-21-2008, 04:53 PM
 
37,315 posts, read 59,697,706 times
Reputation: 25340
we put contract on house in the Tarrant sid ethis weekend--it has almost everythng we are looking for in house but the list price was high for the town and specific neighborhood...especially according to the comps for the neighborhood (a smaller custom one)...we offered $2 more than the avg selling price per ft according to the 3 mo comps our realtor could pull up==and asked that the house meet or exceed the purchase price...
the sellers XXX through that and only came down about $1 per ft in asking price--
we were still over 8$ a ft off--so we added the must-appraise back in and came up some...
they countered at 3$ off their asking sq ft price
their realtor told ours that the seller had been driving around the area talking to builders who said that they could not build his house for what his original asking price was--so he did not want to drop it below THAT price...

well--pricing a house is not about how much it would cost to rebuild what you have--that is what insurance is for...

pricing a house for the market is about what market price is--and can you live with it...
plus he has to pay the realtor's fees out of his profit...which is his problem...
the house is fairly new--about 3 years old--I vaguely know the people who are selling--and think I have a pretty good idea of what they paid for it when they had it built...
which is why we low-balled them with the first offer--which was still 2$ higher than the comps per sq ft...

so we went ahead and did the contract at his price but with the must-appraise clause...
our realtor said she did not think it would go for that...which means renegotiate...

while it is true that this house has custom features that lot of construction does not--it is not in one of the hot RE areas like Colleyville or Southlake--
it is going to be one of the more expensive homes in this town because most land has been built out and there is no new construction going on--so I don't see a lot of market-dirven, new-construction price input into the market like other areas with new construction migh experience...

if I were you I would not offer a penny more than the appraised price...an older home in that price range is probably pretty common on the market--which is pushing the price down...maybe the appraiser is spreading the net too wide because not that many homes have sold in the neighborhood in 6 months...
but that is another sign that home values might be too high...you can ask anything you want--that does not make it fair market value...or true worth of home...
some people might be willing to pay a premium to be on the same street as their best friends and other people might run from that street like crazy...
what makes one house right for another person is difficult to define...appraisals are supposed to be about what something is WORTH--that is a quantifiable factor--supposedly...and from what our realtor said the sq ft and not needing repairs/lot size/neighborhood comps are what determine value and not so much things like whether or not it has stain trim or painted trim, what grade of appliances...

people who think their house is worth this or that often have no clue about its real value in the market place--they know what they want to get out of it or what they put into it...not the same thing as what it is worth...
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Old 09-17-2009, 01:57 PM
 
Location: southwest michigan
1,061 posts, read 3,576,403 times
Reputation: 503
Quote:
Originally Posted by FalconheadWest View Post
Many times, lenders send out an appraiser who doesn't usually work that particular area, and they're not aware of things in that area. Tarrant county appraisers should not be used in Dallas and Collin Counties, and vice verse. The markets are very different.
This is what I was going to ask- is the appraiser familiar with that specific neighborhood? A friend of mine just bought a home with her husband, and the deal nearly fell through because they needed two appraisals in order for the loan to be funded (foreclosure sale) and the second appraisal was done by someone from a completely different area who had no idea that the neighborhood is one of the most sought-after urban areas in the city. He just saw that it was older and "not fancy" and appraised it quite low in comparison with the first guy who was very familiar with the city. Fortunately, they had a third, local, appraiser come, and everything worked out but the appraiser not being from the area almost cost them their deal and their earnest $.
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Old 09-17-2009, 01:58 PM
 
Location: southwest michigan
1,061 posts, read 3,576,403 times
Reputation: 503
Oops, just saw that this thread is a year old. Well, maybe it'll still help someone .
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