Home Selling in 08753>Question Details

Terryr, Home Seller in Toms River, NJ

how difficult is it to get a bank to renegotiate a home appraisal, which we feel is wrong?

Asked by Terryr, Toms River, NJ Thu Oct 6, 2011

The buyer is willing to pay the price we agreed on and is placing at least 20% down. Is it a good idea for me to offer a second mortgage for the difference if the bank won't budge.

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Tough call Terry.. you can do exactly that if the buyer is willing to do so. You can also challenge the appraisal.

Appraisers are picked form a pool and you could have had a bad appraisal.. it is happening a lot of appraisals nowadays. Most that I have dealt with have been pretty lousy.. Recently had an appraiser coming from north west NJ to do an appraisal in Middlesex county.. the guy was absolutely clueless. Clueless about the market, the area and just clueless overall. We fought it , but it was a moot point.

There is a Realtor here on Trulia that is also an appraiser.. I clipped his posting where he sated that he actually hits the number the bank tells him to do.. this way if he follows what the bank tells him... he gets more appraisal work!

You can try, it will cost you about $400. But unless it was blatant and the comps are in your favor.. I'm thinking it is a moot point too.
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1 vote Thank Flag Link Thu Oct 6, 2011
Why not order a 2nd appraisal? If you, the buyer, and your agents agree that the appraisal is wrong, just order a 2nd appraisal. Before you do, get something in writing that states how the bank will handle the two appraisals--take the higher, avg the 2 etc--and that the buyer too will honor the contract for the higher of the two (although it sounds that your buyers are still willing to pay contract price.).
If you hold a 2nd mtg and the buyer ever defaults you will be a 2nd on the property and could lose out on being repaid. Ask your atty and also your accountant for guidance.
Web Reference: http://www.dianeglander.com
1 vote Thank Flag Link Thu Oct 6, 2011
You can actually order a second appraisal. Helped me recently with a transaction. It is frustrating however when an out of county appraiser....several counties away matter of fact, compares your home to a comp that is miles away...I have had that scenario as well. And that happened on my own home! But on a good note...you can try and order a second appraisal.
0 votes Thank Flag Link Wed Jun 5, 2013
I had a convercation with bank about this kind of situation.Bank told me that even your buyer pay 20% down still bank is the owner of the property. If buyer stops paying mortgage bank needs to get its money back.
0 votes Thank Flag Link Fri Oct 7, 2011
Oh, how this market is making it more challenging every day to make a dea!
Web Reference: http://www.PatrizioRE.com
0 votes Thank Flag Link Fri Oct 7, 2011
I think it would be a waste of time to drag yourself and the buyer down this road with the bank. You certainly do not want to loose your buyer. It is very fortunate to be working with a buyer who is putting down 20% in today's market. I don't know of anyone who has contested a bank appraisal based on the information you have given. If you can afford to loose this buyer then go for it. Good luck!
0 votes Thank Flag Link Fri Oct 7, 2011
It would be a waste of time to order a second appraisal as long as your buyer is with the same lender. The lender will not ignore the first appraisal as long as it's factually correct and done per appraiser independence. Unless you can show an error, omission or some material fact that is incorrect, they will always take the lower of the 2 appraisals.

Lower your price, sell your home and move on. It sounds like you have a qualified buyer with 20% down ready to close; I'd take it if I were you in this market.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Fri Oct 7, 2011
It depends on the terms and situation of the buyers employment...If they stop paying that 1st mortgage ..."asta la vista" on your note and the house....I would spend money on a second and 3rd appraisal till you get it right if you can by the lender...I have had buyers that had to fight their lender over the appraised value. The 3 appraisers were in 3 different ball parks, which shouldn't be but they were, $1000 later the lender was on the same page as the buyers and sellers.
So in my opinion its cheaper to maybe help the buyer with a new appraisal or ask them to order an appraisal than lending large amounts of $$$ on a declining asset in an rough economy.
0 votes Thank Flag Link Fri Oct 7, 2011
Terryr,
Offering a second mortgage is probably not an option. Anything like this would need to be approved by the lender and would change the financing the buyer already has in place.
Your agent or the buyer’s agent can provide alternate comparables and ask the appraiser to reconsider or you can order your own appraisal and submit that for the lenders consideration. Neither option will guarantee the results you want.
0 votes Thank Flag Link Thu Oct 6, 2011
Terry,

I think the big question here is; how much is the difference? If the Lender doesn't accept the second appraisal or agree to amend the first, they won't lend your buyer a nickel. You state your buyer is willing to place 20% down, so I'm assuming it's not an FHA loan nor are we talking a large difference?

You run some risk taking a second but you run the same risk challenging the bank. How badly do you want to move on with your life? Is it worth the difference?

Good luck,

Jim
Web Reference: http://FlanaganRealty.com
0 votes Thank Flag Link Thu Oct 6, 2011
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