Sad - losing a gorgeous house, didn't appraise for asking price

[koeeoaddi]

Congratulations on your new place, Glory!

[Bear_Nenno]

@spark240

But you offered “within 5K of the asking price and they accepted”… and then you changed your mind, is that right? Why would you make an offer without having a clear idea of what you thought it was worth?

Because the offer is dependant on lender approval. When you make an offer on a house, it is like saying “I will pay this much if the bank will lend it to me.” And the bank won’t lend more than the house is worth. Everyone in the industry understands this, and it is even written somewhere on the official Offer. That’s why you have to get a “pre-approval” letter. This letter at least shows that there is a bank willing to lend you up to a certain amount. However, even that amount is dependant on the value of the house. The bank will give you a letter saying they will lend you $300,000. But they aren’t going to lend you that much to buy a 150,000 dollar home. And the approval letter will say such.

[kitchen66]

@Musicat

Here’s how to do it (Realtor talking here). Write an offer for what you think it is worth and what you are willing to pay. Include in the offer the contingency that it must appraise for $X and/or must pass inspection. Optionally, you may include the “right to cure” by the Seller, so if anything is found faulty, they may fix it at their expense.

You can ask the Seller to pay for any of these items as a condition of offer acceptance – of course, they can refuse.

If it doesn’t appraise, you can renegotiate.

I had two offers recently that didn’t appraise for the amount of the contract. In one case, the Seller reduced the price and the deal went through. In the other, the Seller said, “No way,” and took it off the market.

One incentive for a Seller to accept a lower price is if they don’t, they will have to find an all-cash Buyer; one who doesn’t need any financing. Those are far fewer than financing Buyers. So it might be in their best interest to accept a lower price rather than none at all.Appeal to whom? The bank hired an expert. You can try another appraiser, but why would the bank consider that? And it might appraise about the same. All appraisers have access to the same public records and only a small part of their job is raw opinion.

And a short sale isn’t necessarily a bad comp. If the only sales in the area are short, then those are the prices buyers are willing to pay.

A bad comp is one that isn’t an arm’s-length transaction, like from a parent to a child.

The only chance you have is to prove the appraiser incompetent by finding a comparable sale in your favor he overlooked. Maybe he didn’t measure right. Maybe he omitted something. Possible, but not likely.

I have another question on this topic … what about when the public records are incorrect and you have the permits that show that the records are incorrect and the appraiser refuses to look at them??? We are in that situation right now. The public records show our home as a 3 bed /1 bath. We had the 1937 permits pulled which shows the addition of a bedroom and bathroom… making it a 3 bed/2 bath. The buyers’ mortgage broker said the difference of the additional bath on the records would put the house’s value up to the same price as the contracted price. We filed a change of Property Data request with the county as well. Now the appraiser is asking for records that the county didn’t keep track of until 1940. This is the first time we have ever sold a house and we bought our home over 12 years ago. It seems to my that it is the appraisal that has all the power … but what can you do when one doesn’t want to budge at all, even the buyers’ mortgage broker isn’t happy with this appraiser. Any suggestions??? Thanks in advance.

[kitchen66]

@lost4life

We needed an appraisal in order to get our private mortgage insurance removed. The person they hired did a half-assed job, missed some major features of the house, and used houses totally different from ours in size, location and features as price comparisons. I don’t know if you could call it an appeal, but we certainly bitched enough that they made some changes and raised our assessment.

Good to know that you had success!

[Mama_Zappa]

@kitchen66

I have another question on this topic … what about when the public records are incorrect and you have the permits that show that the records are incorrect and the appraiser refuses to look at them??? We are in that situation right now. The public records show our home as a 3 bed /1 bath. We had the 1937 permits pulled which shows the addition of a bedroom and bathroom… making it a 3 bed/2 bath. The buyers’ mortgage broker said the difference of the additional bath on the records would put the house’s value up to the same price as the contracted price. We filed a change of Property Data request with the county as well. Now the appraiser is asking for records that the county didn’t keep track of until 1940. This is the first time we have ever sold a house and we bought our home over 12 years ago. It seems to my that it is the appraisal that has all the power … but what can you do when one doesn’t want to budge at all, even the buyers’ mortgage broker isn’t happy with this appraiser. Any suggestions??? Thanks in advance.

Can you complain to the mortgage company that the appraiser is OBVIOUSLY overlooking data? I mean, the appraiser could, if he set foot in the place, see that there is indeed a second bathroom, right? Or is the appraiser arguing that the second bath might not be legal so therefore can’t be counted toward the value? It really sounds like you have grounds for having that appraisal overturned.