Follow up to my sad story - The case of the BAD VA appraisal

I do not know if it is approbriate for you, but some times these appraisers come from other areas and do not know the values where you are., I have had that problem with VA. That is why an agent does need to be there because they often ask for comps

Any listing agent that doesn't show at the appraisal should lose their license.  It's their job to be there to protect their price.

About the only thing that you're buyers can take away is that someone is buying a home that is not worth what they are paying.  Of couse, even with 20% down, it may not appraise today.  Even conventionals are getting more difficult. 

Find another house and feel good that your'buyers won't be saddled with a house that will take another several years to get to market. 

MORNING EVA!  Thanks for the follow up!  This will always happen - and it makes it even more disappointing.  But in the big picture - it's best for the Buyers. Lenn is 100% right.  The home still needs to appraise, but more important, I wouldn't feel good about representing the new potential Buyers when I hear that the last contract fell out of escrow because the property did not appraise at a lower purchase price.  

You've certainly heightened my awareness - see my experience has been that appraisers will call only "sometimes" to say they are going. Often, I have to call the lender and say, "Hey has the appraisal been done yet?".   So I can't always be there but I will definitely work to improve in this area.  Things like this can only be controlled to a certain point - focus on your buyers best interest. You'll find something for them and thank your lucky stars this happened in the end. -- Gabrielle

HI, Eva,

To protect your buyer, attach the VA Addendum to Contract with your RPA.  

This is one that was provided to me by Navy Federal in a recent  VA transaction that closed 3/27/09. The property appraised for 15 K less that we offered, and we were able to negotiate a price just 3K over the appraisal.   A WIN WIN all around.  

Deidre Hayes, Priority Estates Realty and Financial Group, San Diego 858-603-2879

VA ADDENDUM TO CONTRACT                  Date: ___________

                                                                Mo. Day Yr,

       In the event that the Purchaser is placing a VA guaranteed loan, the Veteran Purchaser's deposit shall be placed in an escrow account as required by Title 38, US Code, Section 3706. It is expressly agreed that, notwithstanding any other provisions of this contract~ the Purchaser shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs and the lending institution. In the event the Certificate of Reasonable Value is less than the amount of the contract price, the Purchaser shall have the privilege and option for five days after receipt of VA appraisal to proceed with the consummation of this contract without regard to the amount or reasonable value established by the Department of Veterans Affairs. In the event he shan not so elect, then the Seller shall have the privilege and option of lowering the contract price to the VA appraised value during the same period of five days. This contract is contingent on the approval of the house and the Purchaser by the Department of Veterans Affairs and the lending institution. If the aforesaid approval is not obtained, it is expressly agreed that the Purchaser shall be refunded his deposit, and the contract shall be null and void.

Seller  __________________________          Buyer _______________________________

Seller  __________________________          Buyer _______________________________