Today's Real Estate Activities - Febuary 29th, 2012
And the words of the day are: SETTLEMENT and APPRAISAL! One very often depends upon the other, you know.
After some trials and tribulations, 18 King Street in Pennsville, NJ went to settlement. Well, I guess that isn't quite the truth.....a terrific young couple (the buyers) and a fantastic hard-working couple (the sellers) went to settlement today. Dave Wright of Riverbeach Realty and I were honored to be there, too.
Too bad there isn't a picture of everyone's bright, smiling faces. What a pleasant change from last week's upside-down smiles when we were told there was an 'appraisal issue'. No specific information about the issue was shared. We were given 48 hours to submit an appeal to the Veteran's Association, through Wells Fargo. (Yes, this was a VA Loan.)
We were not allowed to talk to the appraiser. We were not allowed to see the appraisal. We were not allowed to know anything about what was really happening.
Maddening! Can a problem ever be solved by NOT communicating??????
We figured it had to be a matter of the house not appraising for the purchase price. As the listing agent, the appeal fell on my shoulders. My boss, who is a appraiser in addition to holding a Real Estate license, helped locate comparables as we planned our argument. It really is quite frustrating to be so uninformed when you are going to battle. We had no idea if we were trying to overcome a small or a large price difference.
In the end, I decided that it didn't matter what the difference was.....I just needed to support the contract price. After Mr. Pino helped to identify four comparables, I was left to organize my thoughts and complete the report. I did the best that I could, took a deep breath, said a prayer and crossed my fingers. (this problem-solving method should be taught in Real Estate school, I believe!)
Anyhow, the verdict from the appeal was that the value had been adjusted, but it was still $1,500 less than the contract price. (uuuggghhhh)
After some intense negotiations, the buyer agreed to make up the difference so we could continue getting ready for settlement day. It was a good feeling to know that I had helped my clients at that moment. Buyers today are not typically willing to pay higher than the appraised value for a house, so I felt a sense of accomplishment.
At the closing table, I was told that the appeal had convinced the appraiser to change her opinion-of-value to the tune of $5,000! I just cannot believe her original opinion was $6,500 less than our contract price. I truly feel that her work was substandard. By not being allowed to review the appraisal report, I had no chance to review it for accuracy. I believe the new, adjusted price was still not a true reflection of the value of the property. I think the appraiser's poor judgment cost the buyer an extra $1,500 cash-out-of-pocket. It didn't seem the consumers were well-served, at all.
But in the end, as I said earlier....everyone left settlement with smiles. The buyers had a baggie full of new keys to sort out and the seller held a very nice check to purchase their next home.
The Realtors breathed a sigh of relief that they had cleared that appraisal hurdle!