Home Buying in 94025>Question Details

Gatorfans, Home Buyer in 94025

We are in the process of purchasing a house. It came in $15,000 less than the asking price. The seller's are challenging the appraisal due to a

Asked by Gatorfans, 94025 Mon Aug 15, 2011

pool. Does a pool add value to a property's appraised.market value?

Help the community by answering this question:



Appraisers will typically factor a pool into the price IF it is an outstanding pool (think resort) AND it actually is a primary selling feature of the home. Otherwise, a pool doesn’t usually add much.

Sellers can challenge an appraisal. It means additional money out of their pocket, and will more than likely not change the valuation – AND … at the end of the day, since you already have a valid appraisal, you can hold firm to not going above that valuation.

Discuss the whole contingency issue with your agent – the challenge will take time. Time you may not have or want to give.
1 vote Thank Flag Link Mon Aug 15, 2011
Well, you left off the asking price but more importantly the selling price. The value of a pool, depends a lot on the pool it's self. Above ground vs in ground, fiberglass vs gunite, coating, water features etc. Sometime a pool might even lower a property value if it has a certain combination of poor condition or insurance challenging features, such as dive board over a 6ft deep end.

I would suggest you forget the sellers view point and ask, does the appraisal make since to YOU.
Also ask , how do you know the pool was the factor?, There could be other features of the property that the appraiser did not consider as valuable as the seller did.

I don't know your area, but a lot agents like to "blame the appraiser" for over priced properties, but the appraiser is supposedly pulling the same data from the same data base, no matter where they are from, and are pricing based on the worst case scenario for a quick sell.

In summary, if YOU feel the appraisal is sensible, then call the title company, your agent and your lender and start getting the finance contingency info etc., Try getting your lender to share the appraisal with you.
0 votes Thank Flag Link Wed Jun 19, 2013
Either of the agents should be able to dispute the value with additional comps provided to the underwriter. It will not always work; however, oft times (now that lenders are required to use the AMC's...appraisal management companies) a "out of the area" appraiser may not really know the market as well. Remember, whatever you and the seller agree to, the lender will only finance against the lower of the appraised value versus the sales price.
0 votes Thank Flag Link Tue Aug 16, 2011
Hey Gator,
A home in Florida without a pool is a very hot place indeed.
Without knowing the details, but knowing the landscape in most of Florida, I would speculate all the homes included in the comps had pools, perhaps all had 2 car garages and were block constructed. The home may even be in a community of 1500 homes of similar age, size and style. Don't need a post graduate degree to project a value in this situation. These valuable attributes have been normalized.

Now, it becomes a bit difficult to argue that investing $15,000 to $45,000 for a pool, enclousure and pavers will not add value to a home. In what other circumstance does such a investment in tangible value not appear in an appraisal UNLESS the pool was in such a state of neglect as to be a liability. It is unlikely an occupied home would present this challenge.

If I were the homeowner, I would not become a victim to a misguided appraisal. (However, the motivation of the seller is the key issue here) I would offer to hire another appraiser IF you agreed to the outcome or willing to split the difference. Be aware, the new appraiser could be significantly higher than you expect.

Although we all would like to blame the appraiser for these issues, we need to recognize the bank will submit to the appraiser a set of parameters and restrictions allowed as comps used to calculate the appraisal.

Without more details, it's all speculation!
Web Reference: http://www.MyDunedin.com
0 votes Thank Flag Link Tue Aug 16, 2011
An appraisal is an opinion of value not the actual value. I just did a deal which required two appraisals due to the type of loan. The first came in fine the second was 2000 low, the bank made us reduce the price and we sold the property. Now after its said and done the seller is going back and suing the 2nd appraiser for incompetence there were many errors on his appraisal such as sq. footage being under reported by 12%! Other items include choice of comps such as distressed sales. The reason I post this if you are an appraiser and you make mistakes, assign an FHA case number many investors and homeowners are now obtain legal representation from an attorney and are going after your bond and you personally. Many homeowners do not understand that it takes a minimal amount of education to become an appraiser. (High school education and some classes) I know life is hard for the appraisal community and many are running scared and under reporting values. The banks have gone back refused to use some appraisers, sued some appraisers and it doesn’t help the federal government has applied more rules and external pressure to the process. We need a fair and accurate way of obtaining value and the way it works now, the system is broke.
Web Reference: http://www.randshomes.com
0 votes Thank Flag Link Tue Aug 16, 2011
Welcome Florida Fans,
If you were my clients the first thing I would ask you,"Is it worth loosing the home for the $15k?" By the question that you are asking I can only assume that you want to pay $15,000. less than what you originally offered and go with the Appraised Price. The question that I would ask the Sellers would be, "Do you want to loose a sale over $15k?" If you love the house go forward with the purchase and disregard the Appraisal. If it's not love at first sight than ask the seller if they would meet you in the middle and each give $7,500.

Remember, when buying a home there should never be a winner and a looser. Both the Buyer and the Seller should come away form this transaction feeling like they almost received everything that they wanted.
Web Reference: http://www.MKaprielian.com
0 votes Thank Flag Link Mon Aug 15, 2011
I've seen it work both ways. Pools can be a detractor or an asset depending on the buyer. Appeaisers however, can add value to a comp that doesn't have a pool or deduct value from one that does if that makes any sense.
0 votes Thank Flag Link Mon Aug 15, 2011
I agree. A pool is generally considered to be a unique addition to a property and therefore adds value. Sometimes appraisals come in low because the appraiser failed to add value for something like a pool or simply because the appraiser is not familiar enough with the neighborhood to make an appropriate valuation. Appraisals are now handled by companies that enter into service contracts with mortgage banks. Sometimes those appraisal companies are as much as 50 miles away. Sometimes, in the S.F. Peninsula, we get appraisers coming from companies as far as Tracy or Sacramento and, frankly, they are not familiar enough with local values. I don't know if this is what may have happened in your case.

The sellers' agent has a right (duty) to challenge the valuation and/or insist on a secondary appraisal. In addition, I assume that you took the appraisal contingency in your purchase contract. If every other effort to change the valuation fails, the contingency gives you the right to cancel the contract.

Keep in close contact with your agent and make sure s/he is communicating closely with the sellers' agent to know what is happening. Good luck!
0 votes Thank Flag Link Mon Aug 15, 2011
I am not an appraiser but I do expect an appraiser to add value to listings I have that do have a pool if the comps they are using don't have a pool. Most appraisers only give $10K to $20K for pools though.
The sellers can challenge the appraisal it's their right. They don't have to come down in price either. Their agent should have provided the appraiser with comps to prove the value of the purchase price.
You should have an appraisal contingency within your contract and have a right to back out if you and the seller can't come to terms on price due to the appraisal.
Good Luck.
0 votes Thank Flag Link Mon Aug 15, 2011
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