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The house we are purchasing was appraised by the mortgage company (bank) at exactly the same value as the selling price. Is this common? I find it a little strange that the amount is the same.
The house we are purchasing was appraised by the mortgage company (bank) at exactly the same value as the selling price. Is this common? I find it a little strange that the amount is the same.
Yes, very common. Believe it or not, most negotiations lead to a price that is nearly correct given the available market data. It is rare for someone to get an amazing deal, and it rare for someone to drastically overpay.
For example , after analysis, an appraiser might come in "naturally" $5,000 higher or lower on a $500,000 sale, but there is no point to it because nobody can be that exact. Appraisal is not purely science, there is some "black box" to it. So usually if it's reasonably close, they just go out at the sale price.
End of last year we found a gorgeous 2BR townhome, renovated top to bottom, and it came up 17000 less than what we were going to pay. Go figure.
The single family home we are closing on now appraised for 2100 more than the selling price. So that seemed more appropriate.
Ours came back at the exact same price too. We got a really good deal (old lady, with no mortgage who wanted to get out of dodge) and the appraiser actually excluded a few features on the house to make the appraisal in line with the offer.
It is almost like a game the appraiers play --- they have a gut feeling number for the value and then they make whatever adjustments they are allowed to make to come up with the final number. I sold a 1.8 million dollar home that was 6000 Sf but because it was sold for 1.5 million the appraiser just cut down the living area square footage by 20% and came up with 1.5 mill. as the appraised value. After approaching the appraiser he would not acknowledge that the living area he used was not what the assessment records showed. One thing about appraisers - once they mark their stake they won't change it even if one shows their obvious mistakes.
It is almost like a game the appraiers play --- they have a gut feeling number for the value and then they make whatever adjustments they are allowed to make to come up with the final number. I sold a 1.8 million dollar home that was 6000 Sf but because it was sold for 1.5 million the appraiser just cut down the living area square footage by 20% and came up with 1.5 mill. as the appraised value. After approaching the appraiser he would not acknowledge that the living area he used was not what the assessment records showed. One thing about appraisers - once they mark their stake they won't change it even if one shows their obvious mistakes.
Assessment records are almost always incorrect when it comes to livable area. Appraisers actually measure the improvement and report the accurate square footage. There is also the prospect of a field review or 2nd appraisal, especially for a jumbo loan. So no appraiser in his right mind is going to "cut down" the living area to fit his preconceived idea of value. It just does not happen.
Assessment records are almost always incorrect when it comes to livable area. Appraisers actually measure the improvement and report the accurate square footage. There is also the prospect of a field review or 2nd appraisal, especially for a jumbo loan. So no appraiser in his right mind is going to "cut down" the living area to fit his preconceived idea of value. It just does not happen.
I don't know, ours came back with him not including 1,600 sq. feet which are partially below grade, okay get that. He "shaved" off another 200 sq feet upstairs, did not include the fireplace and listed our house as not having lakeviews which is a negative of $15,000. Of the comps he used 2 were on my street, same side and he gave them the $15K for the views another 1 was about two streets back and he gave them "lakeviews" too. So do I think he "shaved off" to fit his "preconcieved" value? Yes, I also think he got that little number in his head from someone, most likely the sellers realtor, why else would it come back exact?
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