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We are on the verge of losing the buyer for our mountain home due to the appraisal. Our home is a duplex and the appraiser only valued our home based on ONE of the two units...they completely left out the square footage, including the extra kitchen and 3 additional bedrooms.
We are on the verge of losing the buyer for our mountain home due to the appraisal. Our home is a duplex and the appraiser only valued our home based on ONE of the two units...they completely left out the square footage, including the extra kitchen and 3 additional bedrooms.
What recourse do I have?
I would have your listing agent contact the Buyer's agent with this article and strongly encourage the agents to work together -- Low Appraisal Killing a Deal? Here
I wish it was just "low"...this is flat out wrong and the buyers want to walk. I can refuse to let them out of the contract until the new appraisal is completed, right?
Contact your agent and have them contact the buyer's agent. The buyer's agent can then contact the lender and explain the situation. Do it now.
The lender will have to look over their paperwork and check to see how they ordered the appraisal. Could just be a screw up in ordering. If they ordered a single family appraisal then perhaps that is why the appraiser only appraised one unit. If they ordered a multi, both would have been done.
Important- Has the buyer seen the appraisal- is it on the single family or multi family form? If it's on the multi form but only valuing half the duplex, then the appraiser screwed up. If it's on the single family form, something else is going on.
Without knowing how your deed is written or how the the property is classified, I can't know what you're going to sell. In some cases, duplexes can be sold separately ( one half or the other) . Somewhere along the line, someone may think only half of your property is being transferred.
The appraisal has to match what the lender has in their paperwork. If it's a multi family transaction, then the lender needs to order a multi family appraisal. If the lender is processing it as a single family, then that has to be fixed.
So you need to check the appraisal report and then with the lender. In a case like yours, a new appraisal can be ordered.
I wish it was just "low"...this is flat out wrong and the buyers want to walk. I can refuse to let them out of the contract until the new appraisal is completed, right?
You need to read your contract, but I highly doubt you can refuse to release them from the contract.
It appears that the appraiser only appraised one side as if it was half of a condo, probably due to being ordered with only one of the addresses used. You can ask for the appraisal by that appraiser to be adjusted as the sale is both units as one sale, not one unit as sold separately.
On the other hand, is it a legal duplex, or just a house that was split into two units without city/county approval, etc.? If it is not a legal duplex, then you cannot sell it as a duplex as it is not going to be appraised as a duplex.
There must be something going on with lenders and appraisors the last few months or so. I know lenders have them on the wheel of fortune so the appraisor can not show favoritism but there are some ridiculous things going on. Totally off prices, I guess spacey/very young? appraisors who take one look at the hall ceiling for the attic steps and if they are not right there well mark the place with attic but not access when the steps are in the closet...not at all an unusual place.
Appraisors are also supposed to note whether the property is in a HOA or not and now I'm encountering some who "forgot".
So...more paperwork, another inspection, more time.
Basically, the person who is getting the loan and thereby the appraisal needs to have the lender send the appraisor back out. As has been said the buyer's realtor can tell the buyer how to do this.
The appraiser should have been supplied with a copy of the sales contract, so that would be a huge error if they didn't know what they were appraising.
It's obviously a mistake. Your agent needs to contact the lender to get it straightened out.
One huge problem with appraising nowadays is that the experienced appraisers such as myself will no longer do mortgage appraisals due to the low fees and overbearing regulatory agencies. You're left with the bad appraisers who are willing to cut corners in order to make money with those fees. Hence, the type of situation you're in.
The appraiser should have been supplied with a copy of the sales contract, so that would be a huge error if they didn't know what they were appraising.
It's obviously a mistake. Your agent needs to contact the lender to get it straightened out.
One huge problem with appraising nowadays is that the experienced appraisers such as myself will no longer do mortgage appraisals due to the low fees and overbearing regulatory agencies. You're left with the bad appraisers who are willing to cut corners in order to make money with those fees. Hence, the type of situation you're in.
^^^^BINGO.
One side or half of a duplex often sells without the other side. It appears that the appraiser was either instructed that, or believed that only one side was to be appraised. Not necessarily "negligence".
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It is really the BUYER'S duty...
