Appraisal on New House Seems Low? (sales, lender, neighborhood)

[Shark01]

Got the result of the appraisal. We bought at 10% off list. We figured the appraisal would come back near list.

It didn't......it is $1,000 below what we are paying.

So what does this mean? Is it all negative, or am I missing something?

Thanks.....and confused.

[lhafer]

Don't know what to tell you.

When we built our first house, the appraisal came back at $11,000 below what we agreed to pay. And that was from 2 different appraisers. All because there weren't any comps similar to ours in our neighborhood. So we had to scramble to come up with $11k for closing.

So $1,000 doesn't seem like a big difference to me.

[HoustonBornNRaised]

Appraising is an art, not a science. Did the $1k bust out the sale? Someone is going to have to cave on the $1k, or it will. The lender won't finance for more than the appraised value.

At least it's only $1k. Your seller would be a fool not to work with you over it. It makes no sense to contest it over that small of an amount (in the grand scheme of things).

[City Love]

Depending on your financing, you might have to come up with an additional $1000 or the sales price might be reduced by the same.

[Shark01]

Its not about coming up with the money (BTW, anyone with a few bucks to share?) just surprised it valued up so much less than list.

Does this have an effect on future value?

Might it be good if it keeps property taxes lower?

Should I order another one?

Really, anyone have some spare cash?

[Zembonez]

Homebuilders can sell a home for any list price they feel like publishing. The higher they are, the more "discount" they can give. The appraiser is most likely the one that is accurate.

[huma281]

If it's a new subdivision, I heard this is normal.

[predatorprey]

Ordering a new survey would cost you almost half of that 1000. Wouldn't you just rather have used it to pay down principle?

[jtothemak]

In a new neighborhood many homes that are new never make it to the MLS so when an appraiser goes to pull comps they do not see what new houses are selling for and at most see inventory homes which are typically heavily discounted. On top of that selling a used home in a new neighborhood can be a challenge as buying a new home process is much easier with negotiations, financing and insensitive so a slightly used home is going to sell for less until the neighborhood is completed.

With all that being said, if you neighborhood is going to take 5 years to complete don't expect to sell if your appraisal is already below the price you are paying. If I was you however I would go back to your builder and raise a fuss and have them lower the price of the house. If you sold your home the day after you close your appraisal is what your house is worth.

[City Love]

Originally Posted by Shark01

Its not about coming up with the money (BTW, anyone with a few bucks to share?) just surprised it valued up so much less than list.

Does this have an effect on future value? A current appraisal has ZERO effect on future value

Might it be good if it keeps property taxes lower? The county will have their own "valuation" of your home. If it's higher, you can always use your sales price and the appraisal to fight it and lower taxes.

Should I order another one? No, another appraisal will cost $400. And if it appraises for higher, you will only NET a savings of $600. Hardly worth the trouble because you also risk it appraising for less. Then you are out the $400.

Really, anyone have some spare cash? No

My answers in red.