Appraisers can have different opinions as well. I suppose you or the buyer could get an second opinion from another appraiser. That might work. But could still be an up hill battle with underwriting. Is it an option to take the $205,000 from the buyer so that you can make this work? In today's tough market a buyer can be very hard to find. Realize in the buyers market we are in, not too many buyers are going to pay one penny over the bank appraisal. Unless you have an extremely unique house like I had back in November, that I explained earlier.
I hope this information helps! Best Wishes to You!
The good news about that is this could help raise the value of the neighborhood. Of course, it would take more than one home to sell over market to make a noticable difference.
We went through this a few times over the last thirty years. The one time I remember most was in ther 90's when people started overbidding on homes which drove the market up. However, as lenders, we still used 'comps' of recently sold homes. It takes quite a few homes to sell over market over a good amount of time to make a difference. But it can be done----has been done----and I believe will happen again.
Appraisals will vary from appraiser to appraiser by a certain percent. I would suggest hiring your own independent appraiser to give you an unbiased opinion. Hope this helps.
Incidentally, I have already moved into another house in AA. So I was paying two mortgages and that led also to my time-sensitive decision. Thanks again for your input.
Do they understand houses on busy streets, but walk to down town don't lose their value?
You should be able to send the appraiser better comps with a justification for those comps.
Unfortunately with the bad loans given for re-financing, lenders only are now allowed to only use certain appraisers. I had one come in low, only a few blocks away from the subject property, but they were using Bryant-Pattengail School instead of Allen School. Hugh difference but the out of area appraiser didn't know.
Anyway if you need help, send me an email.
Anyway, not to bore you or keep you in suspense. I decided to sell it for $205K. I believe I could find another buyer with cash to put down and/or better financing, but that could take months and it might not happen at all. If I took it off the market and rented it for a few years, I might sell it then for $230K, but in the end, I'm not gaining that much over 3-5 years. There were too many unknowns so I'm taking the plunge.
As to the question of whether a buyer would pay above the appraisal price, I think this is moot since the appraisal was so poor. I think a *local* appraiser would give it another $10K in appraised value but this buyer didn't have time to wait (although he was willing to get another appraisal).
I hope I'm not being one of those sellers who just can't admit his home's real value. I always thought your home/car/whatever is worth what a buyer is willing to pay. I had a buyer willing to pay my price, but that maxim didn't hold up in this market. The bank, in its extremely bruised and cautious state, made the decision for us.
However if someone is willing to over pay, and if they have enough money to to put down to make up the difference between sales price and appraised value, then they could probably get the loan. However do not hold on to this thought too tightly, as most people will not pay over appaised value.
I know you are shocked to find out your home has appraised for less then you think it should have. I am sorry this happened, however you are not the only one in this situation, think about your next move carefully...........as you have a buyer willing and almost able................
I'm not an expert, but these would be your options.
(1) the selling price has to be reduced
(2) the buyer has to bring additional money to the closing to cover the gap
(3) the contract is terminated
(4) a combination of selling price being reduced and buyer bringing additional money to closing to cover the gap.
James' question is very sound. As a buyer, I doubt you would choose to loose 16K from the very start in a declining market. As Missy stated, your agent might be able to get the homes used in the appraisal. Most appraisers and lenders are very conservative, but there could have been an error.
Has your Realtor looked at the appraisal? They need to and see if they agree.
If they do than it is best to come to terms with the buyers.
I have found that even in a sellers market, which we are not in, that buyers are reluctant to buy a home that does not appraise even if they have 20% to put down.
Just one question though would you purchase a home for 16k over the appraised value?