Depending on what type of loan the buyer was trying to obtain the appraisal could stick with home for up to 6 months. Itâ€™s a good idea for your agent to speak with the buyer's lender and agent to try and work together to keep the deal together and on track to close.
Coldwell Banker Residential Brokerage
Agents and contractors typically see their clients homes with rosy glasses. Wanting to ignore lower sales and hold onto the higher priced ones.
Banks want to make sure (now, prior to reform not so much) want to make sure their asset, held temporarily, is protected.
Appraisers fear of being called by their license authority or a bank to defend an appraisal.
Like any industry there are great, good, okay, not so good and horrible appraisers. I always explain to my clients, even if the appraisal looks like a 'for sure' value, that an appraisal is a licensed persons OPINION of value. If we ordered 5 appraisals, most likely we would get 5 different values. Those values should be within 2-3% of each other, but sometimes, you get an out layer.
Low appraisals can freak out clients. I walk them through it. Revisit competing houses. And by the end, the buyer typically is saying - why didn't the appraiser adjust for road noise - this comparable backs to the free way. It is an opportunity to help educate clients.
Kindred Real Estate
The listing agent can try to get another appraisal based on his / her initial comps.... but no matter how
you look at the issue it is going to be an issue. See some of the answers below that go into more detail.
That is one reason why the original market evaluation of an experienced Realtor, the sellers Listing agent is every sooooo important....
Good Luck to you
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HAVE THE MOST WONDERFUL DAY :)
1. Blow up the deal,
2. Force the seller to lower their price,
3. Force the buyer to come up with extra cash,
4. Thoroughly frustrate everyone involved in the process.
Even more important, the ASSUMPTION that the appraisal will be low is dramatically affecting buyers:
1. Sellers are insisting that offers be submitted with the appraisal contingency removed.
2. Many buyers are being forced to bring extra cash to the closing table to make up the difference between high contract prices and lower appraised values.
3. FHA and VA buyers, who typically donâ€™t have the cash to cope, are being forced out of the market in droves.
Here are a number of posts that deal specifically with this issue:
Low Appraisals Doom Sales
Appraisers Struggle To Keep Pace with Market
Appraisers Struggle To Keep Pace: Part 2
a) The buyer can pay the difference in cash, which is typical right now with so much competition among homebuyers;
b) The buyer can renegotiate the price with the seller based on the lower value;
IF THE APPRAISAL VALUE IS UNJUSTIFIABLY LOW, I can't speak for all lenders, but we have an in-house LOCAL appraisal department, who is VERY willing to review the appraisal and new comps and evidence and increase the value based on the evidence presented...
So there you go. Buyer can pay the difference in cash, seller can reduce price, or you can dispute the value with the appraiser if the lender has a system which allows it.
If they don't, maybe you should use us instead next time!
WJ Bradley Mortgage, LLC
If the appraisal is questionable, the buyers may request the appraisal be reviewed and the valuation appealed.
If you provide a few more details, I am sure you will get some very useful information.