Home Buying in Cobble Hill>Question Details

Hdare, Home Buyer in Bushwick, Brooklyn, NY

I am in escrow for a condo and my lender just informed me that the appraisal came in exactly at offered

Asked by Hdare, Bushwick, Brooklyn, NY Thu Jul 2, 2009

price. I am happy that it did not come in lower, but am surprised it did not come in much higher since comp sales are about $50k more than our offer price. Is this something to worry about?

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Answers

8
Greetings,
Fred is right...be thankful it appraised for what you needed it to come in at. Your concern sounds like you are worried that you don't have / won't have any value in your property.

No one has a crystal ball so I can only speak on those things that were true in the mortgage business last weekend. It used to be the case that refi appraisals ALWAYS came in at a higher amount than a purchase appraisal.

Appraisal guidelines have also gotten border-line rediculous these days in the name of punishing everyone for the actions of a few. People's livelihoods and freedom are currently on the chopping block in this industry. Appraisers are doing what is required NOT to have any RED flags raised regarding their work. If that means your appraisal has to be modest in order for me to stay in business then dog-gone-it it's worth what you said you are willing to pay for it....THE END.

Good Luck...as my girlfriend would say "It's the Season of the Witch"...Nothing is wrong, things are as they have to be.
1 vote Thank Flag Link Fri Jul 3, 2009
No.

If your Lender followed the new Home Valuation Code of Conduct (HVCC)
required by Freddie Mac / Fannie Mae,
be glad it appraised at your offer price.

http://www.freddiemac.com/singlefamily/hvcc_faq.html

https://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtra…
----------

Best wishes,
Fred
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1 vote Thank Flag Link Thu Jul 2, 2009
Be happy it appraised the way it did and don't be concerned, a lot of properties are appraised at the amount offered.

Anna
0 votes Thank Flag Link Wed Jul 8, 2009
Actually the property that came in at $50,000 higher could have a higher value for many reasons. For instance, that property could have been fully renovated, or renovated with higher quality materials, on a higher floor with a gorgeous view, larger square footage, rooftop deck or private terrace, extra bath or separate dining area, etc. Any of those items just mentioned could have raised the value of that condo.

Sometimes just because one unit has a higher comp and is similar to yours doesn't mean the value is going to be the same.
Web Reference: http://www.KandHhomes.com
0 votes Thank Flag Link Fri Jul 3, 2009
An appraisal is just a tool to protect the lender and ensure them that the asset securing the loan (the condo) is worth at least the sales price.

The market dictates home prices, and the true value of the condo is going to fluctuate anyway so I wouldn't worry about it. Stuff like that can drive you crazy, just like if you looked up your 401k balance 10 times a day. All that matters is when you sell the condo it's worth more than you paid for it, so sit back and relax and good luck with your closing!
0 votes Thank Flag Link Fri Jul 3, 2009
As the others say, don't worry. It's a game. What it means is that the appraiser looked at the condo, looked at the comps, and it appraised at or (highly likely) somewhat above the purchase price. And you're probably right that it appraised for around $50,000 more than the purchase price. Appraisers (when appraising for mortgages) almost always have put down an appraisal equal to the purchase price so long as the actual appraisal is there or higher.

When a property fails to appraise for the purchase price, then they'll put down the actual appraisal price.

So, don't worry. It's all part of the process. And it won't have any effect on you when, at some point in the future, you want to sell.

Hope that helps.
0 votes Thank Flag Link Fri Jul 3, 2009
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
Dear Hdare:

I wouldn't worry about that. Most of the time the appraisal will not come in above the actual sales price in the contract. For some reason it seems the appraisers do not like to do that. Just be glad that the appraisal did not come in short, that would have been a real problem!

If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Phone: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Fri Jul 3, 2009
Appraisers are particularly reluctant in this climate to ever appraise anything at any amount over contract price. Only once in the past two years have I ever had an appraisal come in above, and that was an exceptional case. These figures have nothing to do with the market and everything to do with covering themselves, so don't worry and enjoy your new home.
0 votes Thank Flag Link Fri Jul 3, 2009
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