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I am curious. How many of you have had a buyer's appraisal come in low? How was it handled?
My realtor told me I should get an appraisal but I think often appraisers try to make a value anyway, so a deal doesn't fall through.
1. If you are buying a house with a loan.....you have to get an appraisal. It isn't an option. The lender is going to make sure that the property for which they are providing funds...is actually worth the amount they are lending.
2. Appraisers get paid whether the sale closes or not.
In summary; unless you are paying with cash....you will be getting an appraisal. The appraiser has no incentive to "fudge the numbers" to make the house look more valuable on paper than it is. They do not work for the lender, RE firm, or anyone else involved in the transaction. They are a third-party contractor who simply provides their opinion.
Usually when a buyer's appraisal comes in low; they can ASK the seller to either lower the sales price to appraised value, or meet somewhere in the middle. The seller has no obligation to do this (and some won't budge). At that point; if the seller will not lower the sales price to the appraised value....the buyer either has to make up the difference in cash at closing; or (in my state) can walk away from the deal less their DD money (assuming the DD date has not yet passed).
1. If you are buying a house with a loan.....you have to get an appraisal. It isn't an option. The lender is going to make sure that the property for which they are providing funds...is actually worth the amount they are lending.
2. Appraisers get paid whether the sale closes or not.
In summary; unless you are paying with cash....you will be getting an appraisal. The appraiser has no incentive to "fudge the numbers" to make the house look more valuable on paper than it is. They do not work for the lender, RE firm, or anyone else involved in the transaction. They are a third-party contractor who simply provides their opinion.
Usually when a buyer's appraisal comes in low; they can ASK the seller to either lower the sales price to appraised value, or meet somewhere in the middle. The seller has no obligation to do this (and some won't budge). At that point; if the seller will not lower the sales price to the appraised value....the buyer either has to make up the difference in cash at closing; or (in my state) can walk away from the deal less their DD money (assuming the DD date has not yet passed).
I am not sure why you are commenting on the fact that you have to get an appraisal. I never said anything about whether to get an appraisal or not.
2. I know how appraisers get paid. I used to be one. And you are wrong that they have no incentive to fudge. A lender will ask an appraiser to make a value. They often work for the lender.
I am not sure why you are commenting on the fact that you have to get an appraisal. I never said anything about whether to get an appraisal or not.
2. I know how appraisers get paid. I used to be one. And you are wrong that they have no incentive to fudge. A lender will ask an appraiser to make a value. They often work for the lender.
...this line from your OP suggests you think the appraisal is an option and that you seem to question whether you "should do it or not"....
Quote:
My realtor told me I should get an appraisal but I think often appraisers try to make a value anyway, so a deal doesn't fall through.
I am curious. How many of you have had a buyer's appraisal come in low? How was it handled?
My realtor told me I should get an appraisal but I think often appraisers try to make a value anyway, so a deal doesn't fall through.
1.
Appraiser screwed up significantly.
Buyers had the needed money for the difference and wanted the house.
They closed.
2.
Appraisal was $8000 low on new construction.
No appraisal contingency.
Buyer said, at my suggestion, "I want to close, but I won't pay over appraisal price."
Builder agreed.
The buyer's deposit was not enough to cover the difference, and the builder would likely have had holding costs and sold at similar or lower price anyway.
And you are wrong that they have no incentive to fudge. A lender will ask an appraiser to make a value. They often work for the lender.
Lenders may ask an appraiser to "make value" but it is up to the appraiser to say no. While the lender is not obliged to adhere to USPAP, the appraiser does. And the lender can be reported for putting pressure on the appraiser which is a federal offense.
I have 1-2 low appraisals a year, it seems, during transactions.
Only one had errors in it, and I caught those and they were corrected.
All of the other appraisals that were low were not unexpected. When you push the price on homes, you can't always expect that appraisers can get there ethically. All of my other low appraisals were those situations.
So in hot markets, buyers brought in the difference. In slow markets, sellers dropped the price to the appraised value.
They come in low sometimes. Some of those are legit and some of them I feel the appraiser didn't get it right. Sometimes the seller lowers the price. Sometimes the buyer pays some or all of the difference. Sometimes neither party moves and the contract is voided.
Are you still trying to get up the courage to make an offer on that property?
Just do it! Offer what you think it's worth. See what happens.
The only sure way to lose is to not play.
I totally agree with you on the only way to lose.
lol. I know. This is an old thread.
We are going to make an offer. I needed to consult with my financial advisor to see what would happen if we didn't sell OUR house in time to close. Nothing much is selling around here now and I can't really afford to get stuck with two houses for a ton of time. But we worked out a plan. This weekend has been crazy busy with homecoming at our school. We decided to make an offer and tell them that's it. No negotiating. We are going to tell them that's what we will pay. There will not be a contingency for selling our house. I know they haven't gotten any offers.
The question I am debating now is, since we aren't negotiating anyway, maybe I don't need to fire the first realtor. I will use the new realtor to list our house. I have been cleaning, cleaning, tossing stuff, decluttering. This is the first full week of school since we went back so hopefully, I can get some stuff done around here. I want to have the stager over to advise me on what I need to do.
Interestingly, I was at a party this weekend at a house that is on a similarly sized lot, build around the same time and about 20 % bigger. I looked up the values and it says around the same price I think mine is worth. So, it further supports my theory that they are smoking crack. Also, we drove by it the other night because we were out and I wanted to see it a night. It doesn't look like they are living there.
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