This scenario is becoming more and more common and is a direct result of the local real estate market. It is sometimes difficult to get even appraisers to agree on a "fair value" for a home. We recommend requesting a copy of the appraisal to have your agent review the comps that were used to see if they were appropriate.
If your buyer is required to use a bank for financing, it is unlikely that they will be granted funding for a home that does not appraise for the sale price.
In most of these situations the seller has little recourse than dropping their price to the appraised value. This is not easy to accept but if the home's value is determined to be accurate and you have a willing buyer..........
Individuals that have found themselves in similar situations ...losing on one home, find themselves saving on the new home....With any luck it will be a wash or even better.
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This is the problem with the appraisal system. Rather than asking for an opinion of an absolute dollar value, lenders should be asking for a value range or a determination that the sales price is reasonable. But there's not even a hint of a movement toward changing things, and nowadays, we're really feeling the consequences of the current practice.
The system now is taking the least expert appraiser because they will do it faster and cheaper. Leaving out the experienced and educated ones a side.
In time the system will figure out why we are here again. Not great time to sell, but in your case, just take it and go, trying to do much else will leave you with your home longer. Winter is coming and the market slows during that time and you might not get another buyer until spring and by then it will really be too late.
You could ask the appraiser to re-evaluate the appraisal. In general though, the buyer's lender takes into consideration that in most parts of the country the bottom of the decline hasn't been reached yet.
If the appraiser comes back wth the same result you have 2 options. 1. You bring the missing amount to the table at closing or make an arrangement with your lender for later payment of the deficency. That's called a short payoff vs a shortsale. The second option is a short sale. That's where the lender takes less than is owed because the seller is insolvent.
Talk to your Realtor about coming up with comps for the 215K value. Also ask your Realtor to give those to the buyer's lender appraiser contesting the appraisal value. Seek legal advice. If you can not afford an attorney, do seek legal counsel from Legal Aid in your area.
There is no immediate solution unless the appraiser will agree to re-evaluate his comps. Hope that is of help.
You and your Realtor should first talk to the lender, and present copies of closed sale listings that validate your price to see if you can get a review of the appraisal price. Appraisers are sometimes working outside their area of expertise, and are causing a lot of problems in the market. Even if you can't get a better price on the appraisal, the price on your house is still negotiable between you and the buyer, with the help of your Realtor. You may be able to agree on something in between the $205K and $215K. Don't give up yet!
Associate Broker, ABR,GRI,CRS,CRB
John L. Scott RE
Silverdale, WA 98383
The appraisal is in the ball park of the suggested list price. You could try and get another appraisal, but the reality is that the buyer will want to go with what their lender is telling them and that's what the lender will use to approve the loan.
You may have to lower the sale price to keep the deal together.
Sorry hear about this
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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If you don't believe the appraiser, you can re-appraise, but that's difficult given the new rules the appraisers have to live with nowadays.
I hope that helps!