Appraisal less than offer... sound familiar?

My sister-in-law is an appraiser and we had a long talk about the business over Thanksgiving. There is a disturbing amount of pressure on appraisers to come in with a value that matches the sales price. The process is supposed to be blind, but it is not. She stopped getting calls from one client after she came in under on two properties.

To come in 20k under the sales price? There's a serious problem there. I agree that you need to re-negotiate or walk away.

Posted by: guest at November 30, 2007 1:53 AM

I had a similar problem. The appraiser used comps of frame houses when appraising my brownstone so the value came in under what we were paying. We didn't bother appealing it since the value of or mortage was covered but appraisers definitely make mistakes because they don't know the area.

Posted by: guest at November 30, 2007 7:55 AM

I suspect changing the mind of the bank is impossible in this climate. When things were up up up appraisers looked back. Now they are instructed to look forward. It is quite likely the appraisal is correct and the purchase might be worth 20k less in 3-6 months time. Not that that should bother you, but it changes the loan to value ratio.

If you've any kind of deposit at all, try a home loan from the FHA fed home loan administration, they can loan 100% so if you have even 10% down, the 20k drop shouldn't be a problem.

Posted by: guest at November 30, 2007 8:47 AM

You haven't told us the most important thing: what you WANT to do. Do you really want this place, and are looking for a way to make it happen, or do you not really care, and are asking 'Should I bail out?' What do you mean about a less desirable mortgage? Your rate goes up or you have to pay a fee? Again, are you willing to do that to get the place, or looking for a way out, or want to negotiate a lower price?

Posted by: guest at November 30, 2007 10:20 AM

I had an appraisal come in very low for my recent refi. The appraiser was afraid of animals and would not go into a room if one of my cats was there. Removing the cat didn't do it for him, either, and he just stuck the camera in the room and took a shot, never going in.

When the appraisal came in really low, I called up and complained and asked for a new appraisal, which I got, after a lot of high level bitching. The new appraiser, from the same company, was not cat phobic, and actually went into every room, and my second appraisal was significantly higher.

All that to say, appraisers are not perfect either. If this place is otherwise perfect for you, it might be worth the $500 to get a second opinion.

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Posted by: guest at November 30, 2007 11:52 AM

I can see appraisals for apartments in my building that are always higher than what we know the units would sell for... usually about 20%.

Posted by: guest at November 30, 2007 1:48 PM

Get ready to see more and more of this as we finally catch up with the rest of the nation. Face it folks, the party is over and prices are going to fall back to where they should be. Even in New York there is no way to maintain the 300% price increases over the past 5 years if this country goes into a recession. How will people make those crazy payments with their unemployment checks?

Posted by: guest at November 30, 2007 5:10 PM

to 11:15

I am a certifed NYS appraiser. What do you mean by the appraiser coming in "low"

Does low mean you have comps to support a fair market estimate of your property, or

does low mean it is lower than what you think your house is worth, simply because you want it to be.

im just curious to hear your argument. maybe the appraiser missed some comps, but it would interesting if you could back up your estimate

Posted by: guest at December 3, 2007 12:40 AM

I guess 11:15 is part of the "disturbing amount of pressure on appraisers" mentioned by 1:53.

Posted by: guest at December 3, 2007 1:55 AM

Thank you Appraisers. I have been in an overpriced sellers market. Although I made an offer for a home - it was the only home I could find in Seattle that I could afford that offered any amenties that I wanted. However, I was really skeptical of the price to value. It also in a new sub division and although the contractore gace 20K in incentives, I was still highly skeptical of the price to value and it was a big stretch for us to pay the price the builder demanded. Well, my appraisal came in today, and thank god. It was very thourough and came in at 25K under the sale price which is exactly what I had estimated the actual value of the house to be. Thank you, thank you, thank you!!! I finally have some leverage in this rediculous market and he is saving me from being up side down before I get into this any further.

Posted by: guest at July 3, 2008 1:05 AM

Thank you Appraisers. I have been in an overpriced sellers market. Although I made an offer for a home - it was the only home I could find in Seattle that I could afford that offered any amenties that I wanted. However, I was really skeptical of the price to value. It is in a new sub division and although the contractor gave 20K in incentives, I was still highly skeptical of the price to value and it was a big stretch for us to pay the price the builder demanded. Well, my appraisal came in today, and thank god. It was very thourough and came in at 25K under the sale price which is exactly what I had estimated the actual value of the house to be. Thank you, thank you, thank you!!! I finally have some leverage in this rediculous market and he is saving me from being up side down before I get into this any further.

Posted by: guest at July 3, 2008 1:07 AM