House Appraisal 8% Under Bid
House Appraisal 8% Under Bid
Hello! Our daughter's house was on the market for $435k. They received three offers - 435k, 450k, and 450k. The buyer's appraisal just came in at 415K. There is a lot of consternation about the low appraisal, especially in the current market. Apparently, the one comp the mortgage company used did not have an extra detached garage or fenced back yard, which our daughter's house has.
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
Re: House Appraisal 8% Under Bid
I'm not sure how the mortgage appraisers can get an accurate number with housing prices going up daily in this crazy environment. I'll be in the same situation soon since I am also trying to sell my house in order to move to another location. I'll be very curious what the replies here are.
Re: House Appraisal 8% Under Bid
Sell it to someone who can put more down and won't be locked out due to the low appraisal.
If the buyer wants the house enough, there's no impact on the seller.
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Re: House Appraisal 8% Under Bid
Alohamsheald wrote: ↑Fri Jan 21, 2022 5:32 am Hello! Our daughter's house was on the market for $435k. They received three offers - 435k, 450k, and 450k. The buyer's appraisal just came in at 415K. There is a lot of consternation about the low appraisal, especially in the current market. Apparently, the one comp the mortgage company used did not have an extra detached garage or fenced back yard, which our daughter's house has.
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
The true value of anything for sale, from a car to a backhoe to a home to a 50 story high rise building, is what someone is willing to pay for it, now.
Appraisals vary depending on how and who does it. And, it's only one of the many variables in ascertaining the "starting value" of a home for sale. Then, take in other factors such as curb value, market demand, what "buyers are offering", etc, etc. . .
Suggest relist the p;roperty slighly higher than the current 3 offers, or take one of the existing offers.
Do not let the "appraisal" determine the selling price that accurately. Let demand determine the selling price. IE: what is the going rate that people will put down hard cash for?
Of course, a buyer is going to use an appraisal to bargain the price down. And, a good sellers agent will counter with just as valid reasons for higher. You are 15,000 dollars away from making a deal. Look at it this way. Somewhere in between that is your deal.
So, either sell it at whatever price, get another sellers realtor that knows how to bargain, or relist, etc.
R/E can end up selling for any amount far above or below an appraisal.
j
Last edited by Sandtrap on Fri Jan 21, 2022 7:16 am, edited 1 time in total.
Re: House Appraisal 8% Under Bid
We sold a house last year and put a "no appraisal contingency" clause in the contract to avoid issues with buyers revising their offer. Good thing too, because the appraisal came back 50k lower than the offer on the house. The buyers had to kick in a few extra bucks on their down payment to make the lender happy and all was well. Obviously this is only acceptable in a strong seller's market.
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Re: House Appraisal 8% Under Bid
All depends on the market. In the past, you would have to come to an agreement to either reduce the sale price, or agree on a price that the buyer would bring more cash, and you reduce the selling price where the lender still accepts the down payment and selling price.
In hot markets (all markets are local, not nationwide) you can ask the buyers to put the difference in cash.
It all depends.
In hot markets (all markets are local, not nationwide) you can ask the buyers to put the difference in cash.
It all depends.
Re: House Appraisal 8% Under Bid
Yes, I know from experience.msheald wrote: ↑Fri Jan 21, 2022 5:32 am Hello! Our daughter's house was on the market for $435k. They received three offers - 435k, 450k, and 450k. The buyer's appraisal just came in at 415K. There is a lot of consternation about the low appraisal, especially in the current market. Apparently, the one comp the mortgage company used did not have an extra detached garage or fenced back yard, which our daughter's house has.
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
We had this very situation when selling our house back in 2011. Our real estate agent went back and forth to influence an adjustment. I can't tell you whom he talked to or how he did it, but he did it. The appraiser had comps in the neighborhood that were of the same style house but for some reason weren't used. For example, the appraiser was comping bi-levels and this house was a colonial. A completely different type of house.
I think you really should push to have this re-appraised. You run the same risk of a low appraisal with the next sale as well. If you have a buyer ready to go, everyone (the buyer and buyer agent as well) should be motivated to try and resolve the situation.
Best of luck. It was a stressful and annoying situation but in the end it worked out for us. Hopefully it does for you too.
Re: House Appraisal 8% Under Bid
If they did not make adjustments for the extra detached garage and fence (although the fence they may not adjust for) then I would dispute the appraisal stating such.
I am doing a new build and have 11 acres of land and 30x46 shop with ~550 square feet of living space with bathroom in the shop. I had to dispute my appraisal twice due to factual errors. The appraisal came in exactly at the cost to build (which is estimated at ~141 square foot, I'm in semi rural Ga) and was not a bad price to build at all and certainly not elevated.
For example:
The first time the appraiser transposed the square footage of the a house saying it was 4913 square feet when it was 4319 square feet. In addition, the next largest house had a 1400 square foot finished basement according to tax records (although this wasn't easy to find in the mls listing) and the appraiser did not account for that and acted like the full 4300 square feet was above level square footage. However, he never adjusted this in the next 2 appraisals which was frustrating.
He also got the siding of one of the houses wrong that was vinyl he put cedar.
In addition to the above, the amount he gave for differences in features was appalling. However, I did not argue this as it wasn't factual. He also used I think 4/6 comps were >20% difference in square footage. Not one comp was within 5 miles of my house despite us being ~2 miles from 4 neighborhoods that all have similar level house builds as ours (nice and better then most you can find on the market). All comps but 1 were >20 years old. The price adjustment for ages didn't even make sense as he gave more for a house that was 22 and 23 years old then a 29 year old house.
He gave us no credit for the buildout of shop since I didn't include a price quote from the builder (which I had to do to get him to give us credit).
We are doing a ~500 square foot covered porch with cypress wood ceilings and outdoor fireplace....no house has that that was comped and 1 just had a patio-no price adjustment. He only gave $8500 for upgrading to vinyl to brick (his last appraisal he magically changed this to $12500.
Anyways, after the first appraisal and him fixing most of the above and all the comps rising significantly he only increased the value by 14k. Despite the average comp method going up by 35k ( i know they don't take the average but this shows how crap his increase was). The cost value approach (another method they can use especially for new builds or unique properties) also went up by about 40k.
The second appraisal he was giving me 25k difference in value for my shop compared to homes that just had basic shop or a pool, however, on one of the properties he put $2500. He also did not give me near the same final value as the cost value approach (the first time he did right on), so I had my bank resubmit again for the factual error and to ask if he meant to subtract 20k from the cost value approach.
This last appraisal, he randomly adjusted values for the size difference in property and the exterior difference (only 2 houses) all in my favor in addition to fixing the shop add on value for the typo he made. This made the comp houses from the original appraisal go up 45k. However, he subtracted 3500 from the cost value approach by reducing the $ per square foot of my build by $1 (no idea why). He then gave final appraisal exactly at the cost value approach(which was now about 15k less then the comp value). This gave us overall 32k increase from the original appraisal and was satisfactory to me although still low, as ill have about 80k more into the build with land, shop, house (overall all in around 600k).
TLDR:
comb through the appraisal. Resubmit it for evaluation if factual errors are in there. Especially if no price adjustment in comps for not having extra detached garage. I am in disbelief at how bad our appraisal was with errors and the price adjustments he gave for certain things. It made no sense whatsoever.
I am doing a new build and have 11 acres of land and 30x46 shop with ~550 square feet of living space with bathroom in the shop. I had to dispute my appraisal twice due to factual errors. The appraisal came in exactly at the cost to build (which is estimated at ~141 square foot, I'm in semi rural Ga) and was not a bad price to build at all and certainly not elevated.
For example:
The first time the appraiser transposed the square footage of the a house saying it was 4913 square feet when it was 4319 square feet. In addition, the next largest house had a 1400 square foot finished basement according to tax records (although this wasn't easy to find in the mls listing) and the appraiser did not account for that and acted like the full 4300 square feet was above level square footage. However, he never adjusted this in the next 2 appraisals which was frustrating.
He also got the siding of one of the houses wrong that was vinyl he put cedar.
In addition to the above, the amount he gave for differences in features was appalling. However, I did not argue this as it wasn't factual. He also used I think 4/6 comps were >20% difference in square footage. Not one comp was within 5 miles of my house despite us being ~2 miles from 4 neighborhoods that all have similar level house builds as ours (nice and better then most you can find on the market). All comps but 1 were >20 years old. The price adjustment for ages didn't even make sense as he gave more for a house that was 22 and 23 years old then a 29 year old house.
He gave us no credit for the buildout of shop since I didn't include a price quote from the builder (which I had to do to get him to give us credit).
We are doing a ~500 square foot covered porch with cypress wood ceilings and outdoor fireplace....no house has that that was comped and 1 just had a patio-no price adjustment. He only gave $8500 for upgrading to vinyl to brick (his last appraisal he magically changed this to $12500.
Anyways, after the first appraisal and him fixing most of the above and all the comps rising significantly he only increased the value by 14k. Despite the average comp method going up by 35k ( i know they don't take the average but this shows how crap his increase was). The cost value approach (another method they can use especially for new builds or unique properties) also went up by about 40k.
The second appraisal he was giving me 25k difference in value for my shop compared to homes that just had basic shop or a pool, however, on one of the properties he put $2500. He also did not give me near the same final value as the cost value approach (the first time he did right on), so I had my bank resubmit again for the factual error and to ask if he meant to subtract 20k from the cost value approach.
This last appraisal, he randomly adjusted values for the size difference in property and the exterior difference (only 2 houses) all in my favor in addition to fixing the shop add on value for the typo he made. This made the comp houses from the original appraisal go up 45k. However, he subtracted 3500 from the cost value approach by reducing the $ per square foot of my build by $1 (no idea why). He then gave final appraisal exactly at the cost value approach(which was now about 15k less then the comp value). This gave us overall 32k increase from the original appraisal and was satisfactory to me although still low, as ill have about 80k more into the build with land, shop, house (overall all in around 600k).
TLDR:
comb through the appraisal. Resubmit it for evaluation if factual errors are in there. Especially if no price adjustment in comps for not having extra detached garage. I am in disbelief at how bad our appraisal was with errors and the price adjustments he gave for certain things. It made no sense whatsoever.
Re: House Appraisal 8% Under Bid
You have three offers. Make it the buyer’s problem.
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Re: House Appraisal 8% Under Bid
Lenders always try to minimize their risk. One way is to underappraise the property. This forces down tbe loan amount, while not changing the actual value. Should there then be a default and repo, the lender is better off.
I have had this all 3 times I sought a mortgage.
I have had this all 3 times I sought a mortgage.
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Re: House Appraisal 8% Under Bid
Lender has nothing to do with the appraisal other than ordering it from a third party. Even the big boys hire it out to a third party appraisal management company. Appraisers appraise, not lenders.obgraham wrote: ↑Fri Jan 21, 2022 12:55 pm Lenders always try to minimize their risk. One way is to underappraise the property. This forces down tbe loan amount, while not changing the actual value. Should there then be a default and repo, the lender is better off.
I have had this all 3 times I sought a mortgage.
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Re: House Appraisal 8% Under Bid
Generally 2 options. And this has grown increasingly common in this crazy market - especially as rates are rising and banks are seemingly growing concerned that values are inflated as of late.
1) Seller lowers price.
or 2) Buyer finds more money.
1) Seller lowers price.
or 2) Buyer finds more money.
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Re: House Appraisal 8% Under Bid
A low appraisal has two consequences. It limits the size of the loan a buyer can get. And it makes some buyers antsy, they suspect they are paying too much.
(Seems to me we had a discussion of the second case not so long ago on this board).
Seller has to decide how strong her bargaining position is and what her objectives are. For example: to sell quickly, just drop the price. To aim for the highest yield: stand pat and go to another buyer if the first one can't play.
Talk to locals (agent, neighbors) about the local situation and then make the play.
(Seems to me we had a discussion of the second case not so long ago on this board).
Seller has to decide how strong her bargaining position is and what her objectives are. For example: to sell quickly, just drop the price. To aim for the highest yield: stand pat and go to another buyer if the first one can't play.
Talk to locals (agent, neighbors) about the local situation and then make the play.
Re: House Appraisal 8% Under Bid
Agree with the above. With three offers, finding someone who can cover the gap seems likely.
In places I've lived, it was also possible for parties to contest the appraisal. We never had to do it so I don't know details. It "might" have involved paying for a second appraisal who then discusses with the bank and/or appraiser #1. Appraisal is anything but an exact science and its not at all unreasonable two appraisers might be off 10% (or more) from one another.
In places I've lived, it was also possible for parties to contest the appraisal. We never had to do it so I don't know details. It "might" have involved paying for a second appraisal who then discusses with the bank and/or appraiser #1. Appraisal is anything but an exact science and its not at all unreasonable two appraisers might be off 10% (or more) from one another.
Re: House Appraisal 8% Under Bid
Many years ago when we sold in a much less sellers market time (early 90's) we had three offers on the house on the first day of the open house. We took the one who was going to use a VA loan, thinking they could get better rates, but the VA came in lower than the offer. We told the seller no, not acceptable, and we'd go back to one of the other offers. The relator ended up volunteering to forgo her commission on the sale of our home because she would get a bigger commission on the purchase of the home we had a contingent offer on. Don't sell for less without contacting the other source of the other offer. It really is a sellers market.
Re: House Appraisal 8% Under Bid
Contesting is possible but in this market with multiple offers I'd say to my selling agent, tell them they have 12 hours to waive the appraisal contingency in writing or we're going to the next offer.Ollie123 wrote: ↑Fri Jan 21, 2022 1:50 pm Agree with the above. With three offers, finding someone who can cover the gap seems likely.
In places I've lived, it was also possible for parties to contest the appraisal. We never had to do it so I don't know details. It "might" have involved paying for a second appraisal who then discusses with the bank and/or appraiser #1. Appraisal is anything but an exact science and its not at all unreasonable two appraisers might be off 10% (or more) from one another.
Re: House Appraisal 8% Under Bid
In my market currently, when this happens the buyer either (a) comes up with the difference in cash; (b) pays for another appraisal or (c) bails and the next offer in line who can do (a) or (b) or waives appraisal altogether gets the house. The seller doesn't lower their price to match the appraisal or meet the buyer in the middle.
Re: House Appraisal 8% Under Bid
Unless your daughter is really in a hurry to sell the house...The appraisal is the buyers problem. Either they come up with the cash or they can hit the road. Simple.
Re: House Appraisal 8% Under Bid
Co-signed.The listing agent should have already called the other two offers to re-confirm interest.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: House Appraisal 8% Under Bid
tim1999 wrote: ↑Fri Jan 21, 2022 2:50 pm In my market currently, when this happens the buyer either (a) comes up with the difference in cash; (b) pays for another appraisal, if the seller is patient, or (c) bails and the next offer in line who can do (a) or (b) or waives appraisal altogether gets the house. The seller doesn't lower their price to match the appraisal or meet the buyer in the middle.
Re: House Appraisal 8% Under Bid
Whoa, just whoa!!!!!
A number of appraisals these days are done without even driving by the property, much less actually seeing the back and inside.
Ask…
WHAT TYPE OF APPRAISAL WAS DONE, in person or “desk”/in absentia?
Because if it is the latter, the buyer has to tell THEIR lender that the lender’s appraisal is incorrect.
This is like in school…where your teacher says “show all work”.
The BUYER is the teacher, the appraiser is the student…and the buyer and your daughter must demand to see “all work”.
ETA: appraisers can’t be trusted story….
in 2018 I was trying to get a $100,000 renovation loan on a $400,000 property owned free-and-clear; that’s right…25% LTV.
The appraiser didn’t like the area and style of house and it was July (110+*) in Palm Springs and he was 85 and cranky that he had to drive all the way from Indian Wells (15 miles) to do this appraisal.
He told the lender “it should be torn down”.
I self funded the renovation….for other reasons.
The house was on the Mid-Century Modernism Tour and in magazines.
It is now worth more than his “beautiful home in Indian Wells on the golf course”
/end of story.
A number of appraisals these days are done without even driving by the property, much less actually seeing the back and inside.
Ask…
WHAT TYPE OF APPRAISAL WAS DONE, in person or “desk”/in absentia?
Because if it is the latter, the buyer has to tell THEIR lender that the lender’s appraisal is incorrect.
This is like in school…where your teacher says “show all work”.
The BUYER is the teacher, the appraiser is the student…and the buyer and your daughter must demand to see “all work”.
ETA: appraisers can’t be trusted story….
in 2018 I was trying to get a $100,000 renovation loan on a $400,000 property owned free-and-clear; that’s right…25% LTV.
The appraiser didn’t like the area and style of house and it was July (110+*) in Palm Springs and he was 85 and cranky that he had to drive all the way from Indian Wells (15 miles) to do this appraisal.
He told the lender “it should be torn down”.
I self funded the renovation….for other reasons.
The house was on the Mid-Century Modernism Tour and in magazines.
It is now worth more than his “beautiful home in Indian Wells on the golf course”
/end of story.
Last edited by phxjcc on Fri Jan 21, 2022 11:57 pm, edited 1 time in total.
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Re: House Appraisal 8% Under Bid
Where are all the cash buyers we keep hearing about? This massive increase in housing prices is different than 2007, right? People are much more qualified to buy and lots are using all cash.
Just get somebody to offer you $450k cash and then the appraisal is irrelevant.
Just get somebody to offer you $450k cash and then the appraisal is irrelevant.
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Re: House Appraisal 8% Under Bid
this. it's worth whatever someone wants to pay regardless of the appraisal.
they just need to pay more 'out of pocket' vs what the bank will loan them.
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Re: House Appraisal 8% Under Bid
+1
In a rising markets, appraisals can trail. They don't use what houses are listed for...only what they close at. Appraisals are a guess. The appraiser typically hasn't been inside the comparable properties.
Re: House Appraisal 8% Under Bid
The lender or mortgage broker is twice removed from the appraiser. The lender hires someone to hire an appraiser. Everyone gets paid.LoveTheBogle wrote: ↑Fri Jan 21, 2022 1:36 pmLender has nothing to do with the appraisal other than ordering it from a third party. Even the big boys hire it out to a third party appraisal management company. Appraisers appraise, not lenders.obgraham wrote: ↑Fri Jan 21, 2022 12:55 pm Lenders always try to minimize their risk. One way is to underappraise the property. This forces down tbe loan amount, while not changing the actual value. Should there then be a default and repo, the lender is better off.
I have had this all 3 times I sought a mortgage.
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Re: House Appraisal 8% Under Bid
I do a good deal of real estate litigation, and this is the correct answer.8foot7 wrote: ↑Fri Jan 21, 2022 2:37 pmContesting is possible but in this market with multiple offers I'd say to my selling agent, tell them they have 12 hours to waive the appraisal contingency in writing or we're going to the next offer.Ollie123 wrote: ↑Fri Jan 21, 2022 1:50 pm Agree with the above. With three offers, finding someone who can cover the gap seems likely.
In places I've lived, it was also possible for parties to contest the appraisal. We never had to do it so I don't know details. It "might" have involved paying for a second appraisal who then discusses with the bank and/or appraiser #1. Appraisal is anything but an exact science and its not at all unreasonable two appraisers might be off 10% (or more) from one another.
One thing I did not see mentioned here was that post-2008, banks are going to be extremely hesitant to get a property re-appraised even if the first company didn't do a great job.
Use the offers you have to get the most money you can, and get it done. Make sure any amendment (including waiver of an appraisal contingency) is signed in writing by all parties.
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Re: House Appraisal 8% Under Bid
What is the buyer proposing? When they get the appraisal, they have the option of walking away or revising their offer. The ball is in their court not your daughter’s. Her realtor can be confirming interest with the other potential buyers, but otherwise she sits tight until they do something.msheald wrote: ↑Fri Jan 21, 2022 5:32 am Hello! Our daughter's house was on the market for $435k. They received three offers - 435k, 450k, and 450k. The buyer's appraisal just came in at 415K. There is a lot of consternation about the low appraisal, especially in the current market. Apparently, the one comp the mortgage company used did not have an extra detached garage or fenced back yard, which our daughter's house has.
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
Re: House Appraisal 8% Under Bid
+2
Taking care of tomorrow while enjoying today.
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Re: House Appraisal 8% Under Bid
its funny how what used to be a buyer-power-move in a weak real estate market (i.e. telling seller that the property didn't appraise as a negotiating tactic) has now turned into a bone-headed buyer move because it signals to the seller the buyer's financing might be flakey and its time to immediately demand appraisal contingency waiver to get the property back in front of other buyers that might have more cash to close if the original buyer can't close.
As a potential buyer I totally would have tried to pull the "it didn't appraise seller, what can you do about it", but now I might think about how quickly I'd want to play that card...
Re: House Appraisal 8% Under Bid
I would suggest to read the sell contract. I think usually the buyers lose money (for appraisal, inspection ...), the seller can always relist and find a new buyer if it is seller's market. I don't like to be a buyer in this house market, prices are getting crazy. Even with appraisal contigency, the buyer can only get the deposit back but loses all other costs.
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Re: House Appraisal 8% Under Bid
I would go back to the other offers before relisting. You may wind up in the exact same situation in a month. Every good realtor knows when a property has been relisted and will want to know why. Everyone seriously looking for that type of property probably already saw it. You might pick up a few people that started looking after the property went under contract. A home sells best and gets the most activity when it is fresh. The exception might be some unique/oddball property that has a limited market.
If one of the other people making offers is interested, I would make them remove the appraisal clause. Where I live, there is no appraisal clause....it is a mortgage contingency (which requires an appraisal obviously). I would add a clause that if the appraisal comes in within x% of the sales price, buyer will put more down or do whatever is necessary to get the mortgage.
If one of the other people making offers is interested, I would make them remove the appraisal clause. Where I live, there is no appraisal clause....it is a mortgage contingency (which requires an appraisal obviously). I would add a clause that if the appraisal comes in within x% of the sales price, buyer will put more down or do whatever is necessary to get the mortgage.
Re: House Appraisal 8% Under Bid
Why does your daughter need other options? The potential buyer agreed to buy it or not based on the appraisal. Now that they have it, do they still want to buy? If not, move on to the other high bidder. Let them get an appraisal through their lender and they can also decide to continue or not.
Re: House Appraisal 8% Under Bid
Full price offer and 2 above ask offers. Follow the advice of those who say it is the buyer’s problem now to find the cash or lose out to other bidders.
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Re: House Appraisal 8% Under Bid
+100 on what others have said. In today's market, this a Buyer problem. Give them 24 hours to come up with additional cash to offset gap, else will be going to next offer. Iron is hot, so do not allow this to cool the fire. With multiple offers there will most likely be another interested party to meet or beat the 1st offer. No NOT adjust pricing for this Buyer.
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Re: House Appraisal 8% Under Bid
I can tell you I had my house reappraised approximately 6 months after buying it (refinance, crazy rate drop) and there was a 75k difference (original appraisal was 50k over what I paid) in appraisal values, and this was in 2018 (no COVID craziness).
Appraisals are definitely not a science, and realistically your daughter should stick to her guns, if they want the house, cough up the extra cash outside of the mortgage process OR they also can ask for a second appraisal from their BANK (or find a new bank) to get it done. Before COVID this also was not uncommon in hot housing markets, now its pretty much everywhere.
Appraisals are definitely not a science, and realistically your daughter should stick to her guns, if they want the house, cough up the extra cash outside of the mortgage process OR they also can ask for a second appraisal from their BANK (or find a new bank) to get it done. Before COVID this also was not uncommon in hot housing markets, now its pretty much everywhere.
Re: House Appraisal 8% Under Bid
Not sure if it's been asked above. But can she sell to second bidder (assuming different bank and appraisal company)?
I would still first try to make a deal with highest bidder
I would still first try to make a deal with highest bidder
Re: House Appraisal 8% Under Bid
Agreed. Also, we wouldn't use the same level of appraiser for a $450,000 house as for, say, an apartment building, an office building, or even a several million dollar apartment or house.
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Re: House Appraisal 8% Under Bid
From my experience, fences don't mean squat to an appraiser. The detached garage might not count either. You should see these as adjustments to the comp if any credit was given. What additional features did the appraiser overlook?msheald wrote: ↑Fri Jan 21, 2022 5:32 am Hello! Our daughter's house was on the market for $435k. They received three offers - 435k, 450k, and 450k. The buyer's appraisal just came in at 415K. There is a lot of consternation about the low appraisal, especially in the current market. Apparently, the one comp the mortgage company used did not have an extra detached garage or fenced back yard, which our daughter's house has.
Their agent is not sure why the other comps in the neighborhood were not used or why the additional features in the house were not considered.
Other than relisting the property, are there any options in this situation? Thank you and best regards.
Mike
With my last sale in 2018, As advised by my realtor, I told buyers in a bidding war that I wanted thier best offer without appraisal contingencies.
I was selling at 711k
Offer #1 850k
Offer #2 770k
Offer#3 810k
Offer #2 was the only one to remove the contingencies. Boy, was he upset with the appraisal came back at 740k. But now it's valued close to $900k.
The agent should have insights on what to do.
1. Fight the appraisal
2. Sell the house at appraisal
3. Buyer walks or they kick in the extra. If they don't then you can cancel the contract and go back to other buyers and do what I did or simply relist.