Hi, what type loan is HSBC offering you? i. e FHA, Conventional etc. Study the appraisal by looking at the comps used by the appraiser, the options available with the comps etc. In this market I would not advise you to buy above appraisal value with so much inventory in the market today. I would make them a final counter based on the new value and that might bring them back to reality.

HSBC may have ordered the appraisal, but the new strict appraisal rules require that they have no control over who does the appraisal - the order to to a central "pool". Many of the appaisers now are coming from outside of the area that they are appraising and they don't understand the neighborhood. I had one appraisal in June from and outside appraiser, who appraised the house as direct Gulf access when in fact there was one bridge to the Gulf - a BIG difference in value. You can contest the appraisal and have it re-appraised by another "pool" appraisier. But what you should do next time, is have your agent or the selling agent (whoever the appraiser has to contact to get access to the house) ask the appraiser where they are from when they call and if they are not local, then refuse the appraisal and tell them to send someone else out.

Good luck

William 50 sqft of size would not account for 12,000.00 of price. There are some other considerations here. They may ask for a second appraisal but you should hold out for your price as they (HSBC) is the one that ordered the appraisal!

You can request a review of the appraisal, which is the first step I would suggest. Many appraisals are coming in very low and when they do a review sometimes the value will be updated. Many times though the review will say the appraisal is fine.

Also sometimes buyers will move the loan to another lender and then get another appraisal. I have found up to a 15% difference between the appraised value when two different appraisals are done.

Much of the trouble is due to HVCC. Basically the government did not like the way appraisals and lenders worked together. This has resulted in what is called an AMC or management company being used. The lender requests an appraisal through the AMC and the lender does not know who the appraiser is.

Unfortunately, the AMC's take much of the fee for themselves and often hire the appraiser that will do the appraisal for the lowest price. Many of the experienced appraisers will not work for what they are being paid so this has resulted in appraisals being done by out of area or inexperienced appraisers.

There can be multiple comps that can be used for an appraisal, so if one appraiser uses one set of comps the value can be way different than when another appraiser uses different comps.

Some buyers are now paying for two or three appraisals so they can buy the home.

Sincerely,

Jeff Launiere, P.A.
Real Estate Consultant
Keller Williams Realty
813-469-3163 (Direct)
800-622-0886 (Fax)
mailto:Info@SweetHomeTampa.com
http://www.SweetHomeTampa.com
http://www.SweetHomeTampaBlog.com

Get a Free Market Snapshot at http://www.TampaMarketSnapshot.com

Professional Designations:
Accredited Luxury Home Specialist (ALHS)
Certified Distressed Property Expert (CDPE)
Competitive Pricing Specialist (CPS)
Transnational Referral Certified (TRC)
Certified Internet Expert (e-PRO)