Appraisal problems (sales, housing, agreement, price)

[stars99]

hi, is it common for the appraisal to come in lower than the offer , and ruin the whole deal? Or is that rare? Thanks!

[almost3am]

We are doing a corporate relo right now, and it has happened frequently among my collegues. Three options I have seen: The deal is either dead, the buyer must find more cash for the downpayement, or the seller must reduce the price. #1 & #3 are most common here, but I know a woman here did #2.

[middle-aged mom]

It's more common than it used to be, especially during the previous appreciating market.

An appraisal is one person's opinon of value at a point in time. Rarely will two appraisals agree.

How cautious might you be if you were lending a complete stranger $100,000-$1,000,000, out of pocket in an unstable market?

[Silverfall]

It's common these days.

[Annemieke Roell]

Originally Posted by OrlandoRE_Miracle

hi, is it common for the appraisal to come in lower than the offer , and ruin the whole deal? Or is that rare? Thanks!

It is very common. And it is not as if we are purposely trying to "kill the deal".

I never look at the purchase price on the agreement until I am done with the appraisal report. I my value comes in lower, then the purchase price was set too high. The deal is not ruined, necessarily. The seller can lower the price or the buyer can bring cash to the table.

[ETex2]

Originally Posted by OrlandoRE_Miracle

hi, is it common for the appraisal to come in lower than the offer , and ruin the whole deal? Or is that rare? Thanks!

Some people make the assumption that all buyers are experts in the value of real estate, and the appraiser had just better fall in line with the offer, or else he's "too low".

[middle-aged mom]

At some unknown future point in time, the massive unsold inventories will have wound down. Unemployment will decline. And people will continue to need housing.

I am curious how hard hit areas will transend from a depreciating market to an appreciating market, when the comps will not support this, unless there are an adequate number of cash sales.

[HappyTexan]

Originally Posted by OrlandoRE_Miracle

hi, is it common for the appraisal to come in lower than the offer , and ruin the whole deal? Or is that rare? Thanks!

It's probably rare that an appraisal comes in "higher" then the offer today.

[HappyTexan]

Originally Posted by middle-aged mom

At some unknown future point in time, the massive unsold inventories will have wound down. Unemployment will decline. And people will continue to need housing.

I am curious how hard hit areas will transend from a depreciating market to an appreciating market, when the comps will not support this, unless there are an adequate number of cash sales.

That's an interesting point you bring up. Americans are not savers though and in this day and age of "credit" there may not be enough cash sales to push that switchover.

I just posted an article in the business forum that 45% of the lost jobs are permanent losses. People are retraining and taking cuts in salary to secure jobs. What will that do to RE in the long term ?

[Chuckity]

Originally Posted by HappyTexan

It's probably rare that an appraisal comes in "higher" then the offer today.

I just had that happen last week.

Appraisal came in 10% higher than the purchase price.