I suppose it was bound to happen at some point, an appraisal came in low on a property that I was helping a buyer purchase. Low in this case means under the agreed on purchase price. I've read about it happening and I've heard about it happening but I actually had never had it ever happen in the almost seven years I've been selling real estate. Then it happened again a short time later on a property I had listed. They weren't off by much and these weren't really expenskive house, but the difference was enough to throw a wrench in the works.
One appraisal was performed right in the middle of an electrical repair being made and the power was off so we had the pleasure of having to get a letter cerifying that the entire electrical system, and every component, i.e., furnace, air conditioning, etc was functioning before we could proceed.
Both properties in question had FHA loans. In doing a market analysis on each property myself, the value I was able to determine from the comparables justified the prices we'd settled on. It seems to me that the pendulum has swung the other way on these appraisals, from being ridiculously high in the boom days, to be parsimonioussly short now that banks and other mortgage investors have fallen on their own swords as a result of being too buddy-buddy with appraisers.
With FHA appraisals there's another kicker, FHA has assigned the property a case number and the appraisal will now follow the property around for six months. So even if a buyer is booted in hopes of one with a better appraiser if the next buyer goes FHA the last appraisal will be considered.
I hope this isn't a trend!
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