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We put an offer on a beautiful home 15% below the asking price. We had a chat with the owners during an open house and bonded very well with them. Sellers are apparently very rich people and "did not mind selling the home to the right people even at a discount". The home has been on market only for a few days.
The acceptance of the offer surprised both listing agents, and everyone else who saw the house. A home next door, albeit slightly bigger, sold for much higher just last month. It is in a highly desired subdivision. The inspection came back with no real problems. The inspector was surprised at how well the house was maintained.
The appraisal was done recently, and we just got a report from our lender. The appraisal is around 1% above the contract price, so the loan is not an issue. Now we thought it would be appraised at least 5-10% above the contract price. The comps the appraiser chose were couple of miles away. For some reason, he did not use the couple of homes that sold close to our home in last 2 months- and both of the homes sold for much higher price/sqft than ours. He mentions in the report that farther comps were chosen since there were no sales in the neighborhood . In 1 comp, he put the address of the site wrong (the address doesn't even exist). There surely was a home of similar description that sold in April (in arguably a more depressed market) close to where he mentions. In 2nd comp, he lists the home area as 10% more than what is listed on pretty much every internet cite as well as city website. (MLS listing is no longer available, though). The home also did not have a pool, which he fails to mention.
Now we don't know whether to be happy about the appraisal or not. Does lower appraisal mean lower taxes or is that dependent on sale price?
Only issue we have with the low appraisal is that we may need to sell the home in 3 yrs (job-related moves). Can a higher appraisal help with the resale value 3 years later (presuming the market doesn't go lower)?
Your appraisal is only for the purpose of getting your loan. It has no impact on taxes. The local county tax dept will do their own valuation for tax purposes. It will also not have any affect on resale, especially 3 years out. Besides which, the appraisal is a private matter between the lender and you. It served it's purpose for getting your loan.
Regardless of how good a deal most of the appraisals I'm seeing are right around contract price. It won't be relevant to taxes or resale down the road.
Unfortunately, and right or wrong, the current environment for an appraiser is to be real conservative. However, that doesn't mean he/she should be wrong or not use the best comps, etc. The appraisal is now scutinized by underwriters, possible review appraisers, etc.
Nowadays, anytime an appraisal is significantly higher than the sales price, there better some really good comps. And generally, not just three comparables, but 4 or more closed sales and maybe pending or active listing. Again, right or wrong, that's just the way it is.
Only issue we have with the low appraisal is that we may need to sell the home in 3 yrs (job-related moves). Can a higher appraisal help with the resale value 3 years later (presuming the market doesn't go lower)?
your current appraisal has no bearing on the appraisal or market value of your property in 3 years. You will most likely work with a good real estate agent to set market value based on COMPS AT THAT TIME, and your buyer will have an appraisal (unless they are paying cash) to verify value righ then. just as an appraisal done 3 years ago would have absolutely NO bearing on the value today, right?
sounds like your mortgage company used an appraiser from out of the area and he "phoned it in".... which means he / she didn't work too hard. The value is there and wouldn't worry too much about it.
Unfortunately, and right or wrong, the current environment for an appraiser is to be real conservative. However, that doesn't mean he/she should be wrong or not use the best comps, etc. The appraisal is now scutinized by underwriters, possible review appraisers, etc.
Nowadays, anytime an appraisal is significantly higher than the sales price, there better some really good comps. And generally, not just three comparables, but 4 or more closed sales and maybe pending or active listing. Again, right or wrong, that's just the way it is.
Nonsense. An appraiser's job is to give an objective value, not to be conservative.
And appraisals have always been scrutinized ...... and reviewed.
...Only issue we have with the low appraisal is that we may need to sell the home in 3 yrs (job-related moves). Can a higher appraisal help with the resale value 3 years later (presuming the market doesn't go lower)?
May be too late now, but did you consider renting instead until you settle into longer term situation? The odds the market will go down further in the next 3 years are probably higher than remaining stable or going up. But depends on your local market area.
Yes, but not over scrutinized like they are these days.
Perhaps. And that is a good thing.
However, any appraiser who is being "conservative" right now can get into just as much trouble for that down the road as other appraisers who over-valued several years ago and are now being reviewed and reported.
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. In 1 comp, he put the address of the site wrong (the address doesn't even exist). There surely was a home of similar description that sold in April (in arguably a more depressed market) close to where he mentions. In 2nd comp, he lists the home area as 10% more than what is listed on pretty much every internet cite as well as city website. (MLS listing is no longer available, though). The home also did not have a pool, which he fails to mention. 
