Home Selling in 75002>Question Details

Vito, Home Seller in Texas

What happens when an appraisal is 25k to 30k less then asking price- However the potential buyer won,t let us?

Asked by Vito, Texas Wed Mar 5, 2008

see the report???????

Help the community by answering this question:


IF they won't show you the appraisal and they are trying to get you to reduce your price by that much, they had better be willing to back up what they are saying. Nothing is saying that you have to go back to the negotiating table IF they don't want to show it to you. Just refuse and put the property back on the market.
I DO agree with Elisa below about getting your own appraisal. I advise most of my sellers to get their own appraisal prior to listing the property. That way, we KNOW where the house is going to come in at and when it comes to negotiations, we have that to back up our counters. It is well worth the $200 - $400 when it comes to the buyer wanting you to knock even $1000 off the listing price.

By the way, WHAT does YOUR Realtor advise? Just curious.
2 votes Thank Flag Link Wed Mar 5, 2008
If it's true.... I don't see why the potential buyer will not be eager to show you the report to have a strong bargaining position. You might want to question if the potential buyer is in close relationship with the appraiser and has lowered the value a bit to obtain a lower price.

If you still want to consider going through the transaction with this person, you should obtain your own appraisal which generally costs around $300 for single family residence. Better than discounting 25K!
2 votes Thank Flag Link Wed Mar 5, 2008
The appraisal belongs to the person who orders it. But if they wish to use it to re-negotiate, then they MUST allow you to see it. If they plan to withdrawal, the same thing goes. There are different rules in different states, but no court is going to allow them to NOT PRODUCE the EVIDENCE. Armed with that knowledge you now have a leg to stand on. Demand to see the report and refuse to budge until it is presented.

Good Luck.

Gary De Pury
Bay Vista Realty
Director, Florida Association of REALTORS.
2 votes Thank Flag Link Wed Mar 5, 2008
Buyers are entitled to a copy of the appraisal report and credit report. All they need to do is request to the lender to obtain a copy. Also, I assumed this transaction is FSBO since the question states that the "potential buyer" has obtained an appraisal.
1 vote Thank Flag Link Sat Mar 8, 2008
On the buying end, the bank or mortgage company is the one who orders the appraisal and that appraisal is the property of the bank. Your potential buyer may not even have a copy of the appraisal or access to it. Providing that information is at the discretion of the lender.
1 vote Thank Flag Link Sat Mar 8, 2008
Have the title company call the lender and see if the lender will tell them?
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Wed Mar 5, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
Vito, what is your Realtor telling you? The buyer may not have a copy of the appraisal. If the buyer is saying that they want to back out of the transaction and they had a loan approval contingency then that would include the appraisal not meeting the lenders requirements. You will need the lender to produce a letter saying that they didn't qualify for a loan because the appraisal didn't meet the requirements.

25-30K is a BIG GAP!!!! did your agent do market analysis and counsel you on how much to price it at? Your agent should be on top of it and can provide better comps to the appraiser.

If they are asking you to drop the price to meet the appraisal amount, I urge you to get your own appraisal, the buyer's lender won't be able to use it but at least you'll have peace of mind as to what the value is.
Web Reference: http://www.sumnerrealty.com
1 vote Thank Flag Link Wed Mar 5, 2008
I want to thank every one for thier kindness in answering my question. I finally saw the appraisal. The guy used three houses. One was in poor condition and on a very busy divided 4 lane road. These houses always sell for less. Another house was actually IN ANOTHER CITY. The city we live in fights to keep all new homes on two acres or more. Some are on 1 acre lots but average $500,000 and up. There are many homes that cost anywhere from $700,000 to multi-million dollar homes. Our city was also voted the beat suburb to live in Collin County by D Magazine.

The GOOD NEWS is we finally worked out a deal with the buyer and only had to lower our price by $5,000.

0 votes Thank Flag Link Fri Mar 21, 2008
WOW my question is did your realtor comp the house correctly? Prior to listing the house.

The only way I have seen an appraisal less when I was the seller buyer agent one year prior, and then they had to move back to Las Vegas, there was a significant difference in the appraisal I determined based on the appraisal error of missing approx. 800 sq. ft! NEEDLESS to say the appraiser REFUSED to correct the author report and the buyer did not pursue the purchase.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Mar 18, 2008
Thanks for the down vote for explaining the law. Agree or not...It's simply the law.

0 votes Thank Flag Link Tue Mar 11, 2008
Kathy, that is all well and good, but the appraisal process is not regulated by the states. It is a HUD process and if you look at your appraisal forms you will see this. So I understand that you may do it in TEXAS. I am not trying to tell you how to practice TEXAS style Real Estate and I appreciate that you would never tell me how to do it in my state. I am just telling you that this is Federal law.

Again.....I don't care if Santa's Elves pay for the appraisal, if I call and order it, it is mine. Period, exclamation point.

Lastly, my illustration was just that, an illustration. Most mortgage professionals have a buddy that they rely on, there is nothing wrong with that.......Again...Jim from Jims appraisal (and appliance service) is fictional.

Gary De Pury
Bay Vista Realty & Investments, Inc.
Director, Florida Association of REALTORS®
0 votes Thank Flag Link Sun Mar 9, 2008
I'm telling you the way it is in Texas and from my experience in the closing. I don't know Florida law or real estate and would never try and tell someone what the laws or practices are in another state.
I can ONLY speak on the way I know it is done in the state that I am licensed in. AND as far as the lender calling their "FRIEND" to do the appraisal, I have had cases where the lender will call me and ask if I know of an appraiser in the area OR even ask the buyer if they have a preference. Part of the closing process at the title company (which we use in all closings here), the closing agent will tell the buyer to be sure and ask for their copy of the appraisal since THEY PAID FOR IT, they are due a copy of it.
AGAIN, that is the way it is done in THIS STATE.
0 votes Thank Flag Link Sat Mar 8, 2008
Kathy….Way wrong…..

I am afraid that you folks need to check the law. Simply call your favorite appraiser for an explanation. Whoever "ORDERS" the appraisal, owns the appraisal. Not who pays for it or the buyer.

That is why so many lenders will "ORDER” the appraisal, because that locks the buyer to that lender.

Allow me to expand on that answer…..

(LENDER) …No..no…let me take care of that for you. I’ll call my buddy JIM over at my favorite appraisal company. He normally charges “MY CLIENTS” a discounted rate of “ONLY” $350.00. so let me get that as part of my service. ..

(BUYER) Why, that is awesome and you are such a great lender…taking care of all my needs like that….I just can’t thank you enough.

(LENDER) No…Hey it’s part of my job and I really don’t mind. Just send a cheque to my office for the fee and I will handle it. Make the check out to Jim’s appraisal service. Because you see, it doesn’t really matter who PAYS for the appraisal.

(BUYER) OK, a cheque for 350 is in the mail. Thanks again, Bob the Lender!

………….six weeks later………..

(BUYER) Hey Bob, it’s me buyer…I found a much better rate and I am going to go with this other lender…now I need my appraisal so I can still close on time….But we can still be friends….right……hockey tickets…&....sno-cones….?????

(LENDER) Sorry bob..…You see, since I ordered that appraisal, The Financial Institutions Reform and Recovery and Enforcement Act has established that whoever “Orders the appraisal, owns the appraisal and since, I, Bob the lender, did indeed order said appraisal, I own said appraisal. If you want to use another lender you must order another appraisal.

(We’re back in the real world here, folks)

Now, I was a little over dramatic in this illustration, but that is who owns an appraisal.

I have personally fired several Mortgages brokers for conducting business this way. I don’t like it and I don’t condone it. It does happen…..BUT…most reputable Mortgage Brokers will not do business in this fashion. If your s is, I highly encourage you to consider a change.

Gary De Pury
Bay Vista Realty
Director, Florida Association of REALTORS®
Chairman, Communications Committee.
0 votes Thank Flag Link Sat Mar 8, 2008
Karen, I'm sorry, but I HAVE to disagree with you. The buyer pays for the appraisal and it BELONGS to the buyer. Yes, the buyer has to request in most cases that the mortgage company remember who paid for it and let them have the copy, but it DOES belong to the buyer.
0 votes Thank Flag Link Sat Mar 8, 2008
Vito, I believe that is the buyers right as they are the ones who pay for the appraisal. However, if you really want to see it you could offer to pay for it. Hopefully it is not something that is going to kill the deal. If the buyers are asking you to sell it less because the appraisal came in so low I would think they would want to show it to you when requesting you to lower the price. Or are they just walking away because of this?

I hope this information helps! Best Wishes!
Web Reference: http://www.gomelinda.com/
0 votes Thank Flag Link Wed Mar 5, 2008
Then I believe he has something he doesn't want us to see. Appraisers do make mistakes, they are humans
0 votes Thank Flag Link Wed Mar 5, 2008
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