Home Buying in 75052>Question Details

C, Home Buyer in Marysville, WA

Appraisal vs Offer Price

Asked by C, Marysville, WA Wed Dec 12, 2012

Why would an appraisal for an FHA loan come back EXACTLY the same as the offer price? Why did I pay a fee for an appraisal to go and say "yes" it's worth the offer price (not sales price). This doesn't lead me to have much faith in the appraisal process. I'm paying I should get an honest answer as to what the value of the property actually is.

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see HOME BUYER DUE DILIGENCE LINKS at http://www.ebuyeragents.com
click at Dallas Appraisal Dist
Purpose of appraisal was to determine if lender could process an FHA loan
You determined market value when you made an arms length offer. Appraiser said OK
1 vote Thank Flag Link Wed Dec 12, 2012
Thank you for the links- yep we did look at the county appraisal first and made an offer based upon that and some other factors. BUT that still doesn't change the fact that I don't like how the system really isn't an appraisal but just a validation of my offer price.
Flag Wed Dec 12, 2012
you are lucky that the price was the same as the appraised one. It could have been worse, could have been lower so you did really well. Right on the money. Smile it's one of the things you have to go through and pay for, all just for the loan.
1 vote Thank Flag Link Wed Dec 12, 2012
That's one way to look at it...:)
Flag Wed Dec 12, 2012
If the appraisal said that it was worth $100,000k more than what you are paying, then it would be fine for the seller to jack up the price, right?

Of course not. The appraisal is for the bank only and serves absolutely no other purpose. Ignore what the appraisal says and just be glad it came in high enough so that you could qualify for the loan.

I've had instances where a bad appraisal caused the $750,000 home to be appraised for $600,000. While we objected to the appraisal price, there was nothing we could really do and the deal fell through. My buyers lost the home of their dreams.

Best of luck and while you may not be happy about it, congrats on the home appraising for the purchase amount.
1 vote Thank Flag Link Wed Dec 12, 2012
Appraisals are always somewhat subjective. The value of a home is what somebody is actually willing to pay for it. Besides that the appraiser needs to show comparable homes that sold for similar amounts. If not the appraisal may have come in lower than your purchase price which does happen at times. Appraisals usually come in close to the purchase price which is where they should as that is what the home is selling for in the marketplace.

You paid for the appraisal for the lender to be OK with what you are paying for the home in reality. The lender wants to know the price being paid for the property is fair and market value and the appraisal shows this.

Hope that makes sense.

_______________________________________
Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
1 vote Thank Flag Link Wed Dec 12, 2012
Was this a regular sale or a Short sale?
0 votes Thank Flag Link Wed Nov 13, 2013
Did you know that each bank, when requesting a appraisal, includes criteria for establishing comps.
Each bank submits different criteria. Why?
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Isn't an appraisal an appraisal?
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A buyer or seller HAS the option of buying their own appriasal that is free of bank imposed criteria.
That is always an option and the appraiser would be no knowledge of the offered purchase price.
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What, then would you do if that appraisal and your purchase offer matched?
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Be aware, the real purpose of the bank appraisal is to assure the bank can reselll the mortgage. If the consumer wants to beleive it is related to 'value' well the bank is ok with that.
0 votes Thank Flag Link Tue Oct 22, 2013
Not bad.... Great answer.
Flag Tue Oct 22, 2013
Simply, It makes no difference if the appraisal comes in higher than the sales price the main point of the appraisal is just to verify the property is in fact worth what you're willing to pay. I'm taking it your upset because you felt as though the property was worth more than what you paid and in your eyes the appraiser did nothing but just agree with what was already established? Have you read through the appraisal report to review the adjustments to other comps, locations, time frame, etc.The report should be very thorough and clearly show you a lot of time was put into it.
0 votes Thank Flag Link Tue Oct 22, 2013
The purpose it so document value. And value is defined as the price a buyer is willing to give and the seller is willing to take when neither side is under duress to act. The fact that you and the seller agreed to a price is the line they are attempting to document. If the appraised value came in higher would you want to pay the difference? If it came in lower you would not be required to close the deal unless the seller agreed to the lower price, which is why you signed the FHA Amendatory Clause. It is a no lose deal for you.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Fri Dec 14, 2012
Hi C,

Appraisal is a process that is required by lender that they send their selected appraiser out to make sure the property that they are giving a loan on is worth how much it is being purchased. And more importantly the appraiser will note any lender required repair to be done prior to closing.

This is more so of a process to protect lender's interest.

Dixon
Realtor
JP and Associate
http://www.findyourtexashome.com
0 votes Thank Flag Link Fri Dec 14, 2012
You shouldn't care:
The Appraisal is the Bank's way of protecting it's investment; all that matters to the Bank is that the house is worth at least as much as the LOAN.

You should be happy, not suspicious.
0 votes Thank Flag Link Wed Dec 12, 2012
That in opinion is the problem- let the bank for something that will protect them- I'm paying for an appraisal that will tell me the actual value- not to protect a bank
Flag Wed Dec 12, 2012
Perhaps the listing agent was smart enough to price the home within the correct "market range." Perhaps you were willing to purchase the house at a price within that range. Perhaps the appraiser was able to find 3-4 recent sales within your area that suport that price. Review your appraisal to see which comps were used to determine the value. You'll see that the adjusted values show a range. The lender requires that appraisal to protect you and the FHA. They don't know what it's currently "worth" without that appraisal. Enough said.

Barbara Coker
NMLS#228545
Licensed Mortgage Loan Officer
100% Home Loans All Over Texas!
0 votes Thank Flag Link Wed Dec 12, 2012
Actually the listing agent dropped the price several times... I have no idea what the value actually is because the comps are ALL over the board AND there isn't a true comp (home on same amount of property, sqft, features etc) every comp was either adjusted or thrown out- my suspicion is the appraisal came in low and the lender asked them to adjust the price. This all seems "smart" for the folks getting paid that is.
Flag Wed Dec 12, 2012
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