Home Buying in 11209>Question Details

HBuyer, Home Buyer in Brooklyn, NY

The appraisal price is $75K lower than the purchase price, what is the best way to convince the seller to come down?

Asked by HBuyer, Brooklyn, NY Fri Apr 9, 2010

Help the community by answering this question:


This is a tough one! Be prepared to gather a lot of facts to present to the seller. Here are a few:
• Comps of the last homes sold within a 1/2 mile radius, in the past 6 months.
• Ask the buyer for a copy of the appraisal and if it is okay to present it to the seller.
• Step by step, point out to the seller the reasons why the financial institution lowered the amount they are willing to lend.
• Inform the seller, financial institutions are in the business of making money, and would love to lend the maximum to increase their ROI, etc.
• Recommend to the seller that he/she order’s a second appraisal.
• Do a matrix showing the seller the net profit.

If you’re not getting ahead, after all efforts have been made, do reversed psychology. Ask your seller to trade places, if you were a buyer, would you pay $400,000 for something that appraised for $325,000, only because you liked it?

Good Luck!

Pierre King, Associate Broker
Weichert Realtors H P Greenfield
Web Reference: http://www.kandhhomes.com
0 votes Thank Flag Link Tue Apr 20, 2010
The appraisal price is extremely lower, I mean $75,000 is nothing to sneeze at and if the seller would come down it would make a big difference in your mortgage, down payment and closing costs. Also the bank may not finance the home if the purchase price is so much higher than the appraisal price, but it will also depend on how much money your using to purchase the home.

If you did an engineer report you may want to go over it more thoroughly to find if all the main components of the home are in good condition. By the main components I mean the heating system, plumbing, electrical, the roof and overall structure of the home. If there are any upcoming replacements or repairs to be done, you may be able to get the price down.

That's why it's important to have an experienced agent to represent you because there are many things that can come up that can cost you or kill your deal altogether. Contact your agent and if you don't have one hopefully your attorney can assist you.

I hope my answer helped you.
Web Reference: http://www.KandHhomes.com
0 votes Thank Flag Link Thu Apr 15, 2010
I am curious as to the final contract price. The percent of difference between the final contract price and the appraised value can vary greatly.

Potential reasons the appraisal was low could be as simple as an incorrect use code 1 family vs. 2 family or perhaps the listing agent gave the appraiser incorrect comps.

There are always anomalies or outliers in prices paid. There may be reasons a buyer will overpay for a particular property such as wanting to be close to relative or friend. I am not certain if this was your situation.

We hope this helps.

Best regards,
Bonnie Chernin and David Rogoff
Coldwell Banker Mid Plaza
917-593-4068 (Cellular)
0 votes Thank Flag Link Fri Apr 9, 2010
First review the appraisal to see if it is accurate, if it is your agent should present it to the owner. If the owner still disagrees advise him that the bank will not make the loan with a short appraisal. The owner can also hire his own appraiser to check the properties value.
0 votes Thank Flag Link Fri Apr 9, 2010

Paul and Gerard are right. An FHA appraisal stays with the home.

If you have an agent, he/she should be calling the seller's agent to let
him/her know that. Most contracts make the purchase contingent upon
an appraisal coming in at least at the sale price. If that is the case, you should be able to get all your earnest
money back if you walk away and the seller will be stuck with that appraised value. He may be willing to
drop the price so you can purchase the home. He doesn't have to, but he will come up against the same
obstacle with no matter whom he deals.

$75k is an awful lot of money. Why did you offer so much over market value? Did you see other homes
in this price range before you made your offer? Was this home better? How? Was the appraisal done by
a local appraiser? Call the appraiser and ask him/her to explain. I have encountered appraisers who
valued a home too low because they were unfamiliar with the condition of local, recent sales - and after arguing my points, the appraiser increased the value. PS: my buyer's lender also listened to my arguments
and was very patient. If this was not an FHA appraisal, ask your lender to allow a local review appraiser to look it over. By all means call your attorney if you have any trouble.

Good Luck,

Assoc Broker/Realtor
Indianapolis area
0 votes Thank Flag Link Fri Apr 9, 2010
Dear HBuyer:

First call your mortgage banker and get a copy of the appraisal. Then make arrangements to go and meet with the home seller in person and review the appraisal report with them. Explain to the seller and their agent that if they can locate some recent comparable sales (no more than 3 months old) for higher sales prices, we can provide them to the appraiser and see if we can get the value bumped up. If they cannot find higher comparable sales than the seller may become more understanding and open minded and willing to lower their sales price. If the seller does find higher comparable sales, take those sales to the appraiser and see if you can get the appraised value bumped up.

Another thing you can do is have the bank do a second appraisal with a different appraiser. I recently had a deal where the first appraisal came in at $465,000 and we had a second appraisal done that came in at $515,000 which was the actual selling price! In that case we were able to give the second appraiser higher comparable sales that the first appraiser missed.

I hope this answer is helpful to you, let me know if I can be of further assistance.

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Cellular: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Fri Apr 9, 2010
Best yet - If it is and FHA appraisal - tell them that the appraisal and FHA case number STAY with the property. They will not have the ability to get a higher appraisal with another buyer.

Why not ask them to split the cost of a new appraisal. Although you will have to use the appraisal the bank ordered, an appraisal that low tells me that there is a true problem with value.

When the other appraisal comes in low - they may sing another tune and lower the price.

Good Luck!

Gerry Dunn
Associate Broker
Serving Maryland, DC and Northern Virginia
0 votes Thank Flag Link Fri Apr 9, 2010
What is your agent and or attorney suggesting---ask your attorney to discuss the situation with the sellers' attorney, that way the sellers' attorney can discuss the issue at lenght with the sellers and a conclusion can be reached.
0 votes Thank Flag Link Fri Apr 9, 2010
I recommend to talk to your attorney. If you are protected, you can have your attorney call the other attorney and tell him you would back out of the deal if the seller will not come down. Make sure with your attorney that you are not in danger of losing the down payment by doing so.
0 votes Thank Flag Link Fri Apr 9, 2010
Send them a copy of the appraisal and explain the bank is not willing to lend anymore than that because that is what the value of the property is in todays market. Also mention the must desclose that price with future buyers, if asked by law.
Web Reference: http://PaulMVPteam.com
0 votes Thank Flag Link Fri Apr 9, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer