Appraisal Value< Purchase Price
I am looking at a condo in Clinton Hill (an ideal location for me). All the units in the building are partially renovated, but in fairly good shape. My concern is that I’ve been told by the seller’s realtor that condos in that building are appraising for less than the purchase price, causing financing problems…
I am looking at a condo in Clinton Hill (an ideal location for me). All the units in the building are partially renovated, but in fairly good shape. My concern is that I’ve been told by the seller’s realtor that condos in that building are appraising for less than the purchase price, causing financing problems for many potential buyers.
I guess my question is if the condo is in a great location and in o.k. condition, what could be reasons for a low appraisal value?
Would you buy a property that appraises low? Is it overpriced?
Could be a number of things – appraiser’s not getting accurate comparables, the development is much nicer than anything geographically close to it . . . or they could be overpriced – which if the issue is recurring might well be the case. Only advice I’d give you is to visit a LOT of properties, above and below your price range and in a few different ‘hoods. For me there’s no better way to gauge the market. Good luck!
Personally I wouldn’t purchase a property with a low appraisal, unless there was something about this property that was so special and unique that i just didn’t care. To me that’s a clear sign that the property is overpriced. I mean its possible that a bad appraisal is done but if all the apartments in that building are coming in below the selling price that just seems fishy.
Plus do you really want to come up with the cash difference between the apraisal and the selling price?
who’s doing the appraising? i’d only be worried if a battery of appraisers from all different locations and backgrounds were lowballing the place. how far off are the asking prices, it is certainly possible that sellers are suffering from collective insanity, but i also must assume there is hope for a ‘corrected’ appraisal since the realtor is telling you all this. otherwise, why would the sellers’ realtor spill the beans?
I can’t speak to condos but I purchased a house that appraised less than purchase and no regrets. Many of my friends have done the same.
I think the appraisers are often way off in their comparison so you have to really read the appraisal. For example, my appraiser used several frame houses a few blocks away rather than similar brownstones that sold recently on the same block.
Do your own analysis.
It isn’t park slope, but you don’t see park slope prices either. A new construction condo below 5th in park slope sells for nearly 1000 a square foot (god only knows why). A brownstone condo probably more. Condos in clinton hill are still struggling to pass 750 a square foot (settled, not asked). Prove me wrong.
I don’t care how hot Clinton Hill is, or who is moving there, it ain’t Park Slope. Plainly stated. And yet you will see Park Slope prices there lately. So yep, it’s overvalued.