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Hello, here is the story, house offer at $1030000, we accept, and go get the loan, we have 2 banks to work on, now, first bank's appraisal come out said the house worth $825000, 2nd bank's appraisal come out said the house worth $1000000. why there is such big difference? is it anyway to ask how they get those numbers? what should i do? Ask the seller lower the price? i don't see what is reasonable price between these two reports, should i ask the seller lower the house price to $1M or more or back off from the offer? any advice? thanks
If you ask 5 different appraisers the value of a home you'll get 5 different values. Probably the hardest thing he do in RE is estimate the price of a home. People look at things differently and interpret the market differently. The market we are in today is one of the hardest to arrive at a value.
Appraisers look at historical data and we are leaving the winter months when sales & prices are down. Appraise that house this summer and you'll get totally different figures.
The old rule of thumb is a house is worth what a willing buyer and willing seller agree on in an arms length transaction.
Today lenders are wanting appraisals to be on the extremely conservative side.
I can just about guarantee that the $825k appraisal has some sold comps that were foreclosures and I would bet that the $1M estimate specifically avoided distressed sales.
I would probably want to know much more about your long term plans and the trends in the neighborhood before I'd decide to walk or ask the seller to come down another $30K, but in the grand scheme of things I would not worry too much about the appraisals in isolation. Even very skilled appraisers have a tough job right now -- they know that properties that are "roughed up" often are discounted heavily by lenders, yet without an accurate description of the exact condition of sold comparable they may not know that the $1M house that finally changed hands at $775K had a very crazy, angry home owner that removed $30K+ of high end appliances and fixtures and damaged nearly every doorway on their way out, while the $1.25M home that finally sold for $1M was really in very good condition. and was probably a 'strategic foreclosure'... Both houses sold for a quarter million less than ask, and the differnce between a 20% vs 25% discount is not insignficant, but it falls to explain that even in the "upper brackets" there are spiteful irresponsible debtors that harm more then the lender that they thing they are lashing out against...
There are comps supporting each appraisal. Have you seem them? The devil is in the details. Are you working with an agent? He/she should be all over this.
Just curious why you offered $1030000 if you thought it was worth between $900 and 1m.
you know what, the listed price is $1180000....we talked to $1030000, and you know what, right now there is house for sales just across street asking for $799999. about 400sqft less, no pool and no view...what should i do?
There are comps supporting each appraisal. Have you seem them? The devil is in the details. Are you working with an agent? He/she should be all over this.
you know what, both appraisals using almost same houses in area to comps, including both short sales and normal sales house...$825K bank appraisal is done by samll local bank. $1M appraisal is done by one of largest bank in the world.
you know what, both appraisals using almost same houses in area to comps, including both short sales and normal sales house...$825K bank appraisal is done by samll local bank. $1M appraisal is done by one of largest bank in the world.
If they used essentially the same houses for their comps, then the difference must be in the value adjustments they made for items like condition, features, location, etc. Where did they differ and is there good reason? Perhaps one appraiser has better knowledge of the homes condition than the other.
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