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Old 05-11-2009, 12:31 PM
 
65 posts, read 258,896 times
Reputation: 38

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Hi,

We are currently under contract to sell our home. The appraiser for our buyer's lender has appraised our house at 10% less than the sales price. How is that even possible? And is there anything that can be done to prove that the house is worth more? It seems that the appraiser did not include the fact that our house has updated kitchens and bathrooms and is in a better location than his comp houses. Such BS. Now this deal is probably going to fall apart because of one individual's opinion of value. Obviously my buyers did some research to determine what the house was worth. Otherwise they would not have agreed to the price. By the way, even their initial offer to us (which we countered) was at least 5% higher than what the appraiser says the house is worth. So, he's not even in the ballpark.

Ugh. This is so not worth the aggrevation.
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Old 05-11-2009, 12:42 PM
 
587 posts, read 2,014,002 times
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The buyer still has the option to purchase the house eventhough the appraised value is less than the sale price. However the lender may not give the buyer a loan based on the findings. You can also meet the appraised value or If you dont like what you are hearing take the house off the market.
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Old 05-11-2009, 12:59 PM
 
28,461 posts, read 75,235,679 times
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As the seller you really cannot do very much at all.

If the buyer decides to come up with a bigger downpayment the lender MAY still approve the deal, but that is between the buyer and their lender.

The lender has no real reason to want anything than a "floor price" type appraisal, and it sorta sucks that they appraiser is NOT giving you credit for updated kitchens and baths, I have seen MUCH worse. Rarely do appraisers give credit for "better location".

If the buyer wants your house AND you are pretty sure that they really do not having any more cash your agent might inquire as to possibility of the lender allowing another appraisal. If the lender wants more cash for this you could probably structure those costs into a new settlement rider on the contract. Of course if you agent agrees that there are no fresher comps the appraisal is not likely to come back any higher...

This is happening quite a lot now. Really sucks. Total reversal from when appraisals were coming in way over the selling price and new buyers would tap HELOC as soon as they moved in.
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Old 05-11-2009, 06:16 PM
 
65 posts, read 258,896 times
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The whole thing is really ridiculous. My realtor did a market analysis, we set a competitive price, and the house was under contract in 4 days (at slightly less than asking price). Willing buyer and willing seller at a price that generated immediate interest. How can that not be market value? I feel worse for the buyers than for us. They are already in contract to sell their other home and have spent money on inspections, mortgage apps for our house, and who knows where they will end up if this doesn't get straightened out.

Funny thing is that I wouldn't even consider selling at the price the appraiser quotes. So, I guess I'm "stuck" here, which is OK because we didn't have to do this move ...
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Old 05-11-2009, 09:49 PM
 
Location: OK
2,764 posts, read 6,784,323 times
Reputation: 1941
Quote:
Originally Posted by newmom2007 View Post
The whole thing is really ridiculous. My realtor did a market analysis, we set a competitive price, .
Where did your realtor get his/her appraiser's license?

All the buyers have to do is bring cash to the table.
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Old 05-11-2009, 09:50 PM
 
Location: OK
2,764 posts, read 6,784,323 times
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Quote:
Originally Posted by chet everett View Post
. Rarely do appraisers give credit for "better location".
Whenever you se that you really ought to report that appraiser to the state board. Because there really should be an adjustment made for a difference in location.
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Old 05-12-2009, 01:52 AM
 
Location: San Jose (Willow Glen)
180 posts, read 649,775 times
Reputation: 96
Quote:
Originally Posted by Schousse View Post
Where did your realtor get his/her appraiser's license?

All the buyers have to do is bring cash to the table.
Or go to a new lender. It's pretty rare, for the reasons you stated about willing buyer, willing seller, arms length transaction, etc..for the appraisal on a purchase to not come in at the sales price. The appraiser would need a compelling reason to think that the buyer or the seller (buyer in this case) was either not acting rationally or was somehow in bed with the seller trying to defraud the lender.

Tell the buyer's to go to a new lender...new appraisal will likely solve the problem.
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Old 05-12-2009, 06:14 AM
 
65 posts, read 258,896 times
Reputation: 38
Quote:
Originally Posted by Schousse View Post
Where did your realtor get his/her appraiser's license?

All the buyers have to do is bring cash to the table.
I didn't say that the realtor did an appraisal, and I know she's not an appraiser. She looked at the comps (similar to what the appraiser did) and came to a different number. A number that - in her opinion - would get the house sold. The house generated immediate interest and had an offer within days of going on the market. So, I'm struggling with how this appraiser has such a different opinion on value. As I said, willing buyer and willing seller ....
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Old 05-12-2009, 06:21 AM
 
Location: Pawnee Nation
7,525 posts, read 15,430,809 times
Reputation: 7043
Depending on where you are trying to finance, you may or may not be able to provide a different appraisal. You are certainly free to order your own appraisal and challenge the one from the lender. However, you must remember, the purpose of the appraisal is to establish the value of the collateral for a mortgage loan. It is not to facilitate the sale or refinance of a property. The bankers could easily have selected the appraiser because they know he comes in low (conservative) and that should the house go into foreclosure that they have sufficient equity to allow them to recover their exposure. At this point, you do not have the right to a copy of the appraisal. It is considered confidential financial information of the lender. All you can do at this point is suggest a second appraisal (offer to pay for it) and see where it comes in at. Just remember, the appraiser is not working on your behalf, the behalf of the buyer or anyone else. They are attempting to value the property in accordance with the market. And as an appraiser, we like to say "It is what it is."
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Old 05-12-2009, 07:15 AM
 
26 posts, read 83,425 times
Reputation: 54
While it is unfortunate for you, I am happy to see that some houses are not appraising at their sales price. To me, it is a sign that the system is working.

One buyer does not make a market and too often people make an emotional decision to buy a house rather than a business one - so I don't buy the argument that just because you got a buyer means that is the market price.
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