Home Selling in Pasco>Question Details

Needtosell, Home Seller in Pasco, WA

2 years ago we bought our home for $208,000 and it was appraised for this much too. Now we are selling due to job transfer and our agent said we

Asked by Needtosell, Pasco, WA Tue Sep 29, 2009

could sell the home for $215. Five days later we had a full offer on the home but the the appraiser said the home is only worth $205. The home is in immaculate condition with a few improvements since we bought it. What do we do now?

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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.

Good luck
2 votes Thank Flag Link Wed Sep 30, 2009
Big problem. Willing buyer, willing seller, arms-length transaction. Lender needs to have a third-party appraiser ratify the value, but they don't. Now, either the buyer comes up with $10,000 or the seller drops their price - or puts the property back on the market ... hoping that an all-cash buyer comes along? Ouch!

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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.
1 vote Thank Flag Link Thu Oct 1, 2009
Ok, let as appraiser tell you what is going on, lenders look at risk, and the market is still not stabled up yet. Pick of the appraiser is by Appraisal Management Company, for the cheapest and fastest to return the report, and if a review is done, it's normally for even a lower value. So take it and run.

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.

Good luck.
1 vote Thank Flag Link Wed Sep 30, 2009
Hi Needtosell,
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.
1 vote Thank Flag Link Tue Sep 29, 2009

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!

Best wishes,
Jean Bradford
Associate Broker, ABR,GRI,CRS,CRB
John L. Scott RE
Silverdale, WA 98383
1 vote Thank Flag Link Tue Sep 29, 2009
This list price is a suggested price that the should be listed at to attract buyers. It usually is not the price the house will sell for. The fact that you received a full price offer is great, but it's the appraisal that really counts.

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.
1 vote Thank Flag Link Tue Sep 29, 2009
You can always get another appraisal......but I would try to determine why the original appraiser felt the way he or she did...check out the comparable properties they used to come to their conclusion.
0 votes Thank Flag Link Wed Jan 26, 2011
short sale to recover your loss.
if you have extras in your home, ask for appraiser's reevaluation which takes time
split the cost with all parties including the agent you listed your house so everyone takes some loss.
0 votes Thank Flag Link Tue Jan 25, 2011
Appraiser is who lender will review their documents determine allow a loan approval. If you home does not appraise either cancel offer or request a short sale, or pay difference at closing.

Sorry hear about this

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911

0 votes Thank Flag Link Wed Sep 30, 2009
If you want to make that agreement work you may have to accept the appraised value as the new sale price. Remember, listing prices are an estimation of market value. With markets still going through changes and adjustments the listing price may be accurate one week and too high the next. If the buyer is purchasing the home with financing then the buyers' lender would not finance based on the price you want to get for the home. The lender will finance based upon the appraised value. Congratulations on getting a buyer. You can make this work. Good luck!
0 votes Thank Flag Link Wed Sep 30, 2009
Pay the difference (of course and the expenses related to the sale) Maybe is not a good idea.
Try to rent it.
Look for another buyer and risk another low apraisal.
Do buyers has FHA financing or conventional?
0 votes Thank Flag Link Wed Sep 30, 2009
That is the market today, it does not matter what it appraised for 2 years ago. Current market value is today's market. That's why we appraise it, and not just index it from an old sale. Sorry.
0 votes Thank Flag Link Tue Sep 29, 2009
If you can afford to, take the money and run. This is a tiny drop in the house's value compared to 2 years ago. Many homes are worth their 4-year ago price!!

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!
Web Reference: http://www.dugaldallen.com
0 votes Thank Flag Link Tue Sep 29, 2009
Ask to see the comps. use to detemine to value of your home. If your agent have neigborhood comparables or upgrades that value $10,000 than you could present this information to the appraiser to make any adjustments that may have been overlooked. Keep in mind home values have really dropped, and there could be a difference in an appraisal in just 3 months apart.
0 votes Thank Flag Link Tue Sep 29, 2009
By the way, you didn't do so bad if the appraisal came in at $205,000 and you paid $208,000. Many places across the country lost 10% or more per year in value.
0 votes Thank Flag Link Tue Sep 29, 2009
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