Appraised Values not meeting the mark

By
Real Estate Agent with Keller Williams Realty RS-64070

I recently had a client that I represented as the buyers agent...we looked at properties for months, put in offers and finally got one under contract.  Luckily it was the best one that we had looked and an absolute steal.  Everything went well through the transaction except when we got the appraised value (VA Loan), which ended up being $10k short.  At first I thought it wasn't a big deal and $10k didn't seem like much when the property is valued at more then $500k, but it sure is ending up to be a HUGE headache.  The main problem is that the property is one of the nicest in the neighborhood and there are a number of back up offers in place behind ours...That $10k is the credit that we were getting from the sellers for closing costs and the buyers don't want to dish out any more cash.  Seems like we may be stuck between a rock and a hard place!

Best of all the only comps that the appraiser can use have 1 bedroom and bathroom less than the subject property!  Just one of the many bumps in the road in the Real Estate industry...

 

 

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Rainer
42,892
Diane Donnelly
Keller Williams Flagship - Annapolis, MD
Anne Arundel County, MD Real Estate

Hi Chris.  That is a bummer.  Can you challenge the appraisal? Soounds like he didn't do due diligence if the comps he used weren't that comparable.  How much value did he give your home for the additional rooms? Another bump.  Can you negotiate the difference with the sellers?

Apr 21, 2009 10:05 PM #1
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

My question would be, "was the listing agent there at the appraiser's inspection of the home with the comps with which they priced the property?"

If so, did they justify the pricing?

If not, the appraiser was flying without a parachute. 

Apr 21, 2009 10:20 PM #2
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2,064,720
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Appraisers are being scrutinized these days. . I had one for my buyer that the listing agent started at $220K. .reduced to $190K . .we came in the picture with $186 . had a ratified contract and the appraiser came to $180K. .the seller had to accept the lesser price.

 

Apr 21, 2009 10:44 PM #3
Rainmaker
490,793
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

In our neck of the woods we are finding that bank properties and short sales are going for over list price and when the apprisal comes in the buyer is offer the option of buying at the price they offered or they can walk. Here is the challenge many times the price is something like $50,000 over market, and the lastest comp. The appraisors in our area have their work cut out for them.

Apr 21, 2009 11:05 PM #4
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

If in fact you are selling it for market value, and the sellers are giving 10K for closing costs, then it sounds like the appraiser might be correct, but I doubt it.  In VA loans, you have the right to request a new appraisal and appraiser.

Apr 21, 2009 11:35 PM #5
Rainmaker
3,329,973
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

There is a liklihood that one appraiser and another will agree...so working out the price is the best solution...or the seller may have NO offer....$10,000 in concessions is unheard of here...not even half that much would ever fly.

Apr 22, 2009 12:37 AM #6
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Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

It is getting tougher to close the deals. However, it makes us wonder how we do it. Great luck

www.deliateam.com

Apr 22, 2009 12:42 AM #7
Rainmaker
114,369
Chris M.T. Bodden
Keller Williams Realty - Kapolei, HI
RA, CDPE - www.BoddenRealEstate.com

 

Thank you all for your responses.

Diane- The main problem is that there are no other sales of the same bed/bath and size...

Lenn- I don't think the appraiser had a parachute...

Fernando- Not sure about your market, but here in Hawaii the VA appraisers have a reputation of being a bit more conservative.

Lorraine & Loretta- Luckily this is a regular sale and not a short sale or bank owned!  What are time frames in your area for short sales?

Gabe-I'm try to get a 2nd appraisal, but worried about the VA appraisal

Sally & David- Hopefully the price can be worked out...sellers are giving buyer huge credits here.  I just heard of someone getting a $25k credit for closing costs and buying down there interest rate.

Harry- thanks

 

Apr 22, 2009 07:12 AM #8
Rainer
98,658
Judy Schneider
eXp Realty - Bellingham, WA

Wow and all that hard work!! I feel for you and your client! There seems to be alot of it going on. Best of Luck to you both. Keep us informed how it works out!

Apr 28, 2009 02:56 PM #9
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2,305,254
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

I have had two appraisals that I challenged.  I was successful with one.  The other , the buyer actually walked away from the lender and went to another lender and when the appraisal came in, it was right on.  I always am present when appraisals are done and usually have some comps in my bag printed off if they want them.  Sometimes they seem to resent them and sometimes they are thankful.  I have had appraisers turn them down and then later call me and ask for help with comps.

May 05, 2009 02:35 PM #10
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Rainmaker
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Chris M.T. Bodden

RA, CDPE - www.BoddenRealEstate.com
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