I am buying a repo my realtor says I should not worry that the appraisal came in $38k less then it was

Asked by Denise, Phoenix, AZ Fri Jan 30, 2009

appraised for 3 months ago.... I am not so sure
I am only paying appraised value, but should I be worried

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8
James Wehner, Agent, Scottsdale, AZ
Fri Jan 30, 2009
I would suggest that you have your realtor meet with you and compare the property you are purchasing against the other available, pending and sold homes in the area. Since your purchase is a distressed sale and probably needs some sort of improvements, your purchase price should refect that.

Don't worry about what prices were in the past on the property you are purchasing, look at what it is valued at today.

Best of luck!
Web Reference:  http://www.jameswehner.com
2 votes
Paul Welden, Agent, Scottsdale, AZ
Fri Jan 30, 2009
Hi Denise,

What the property appraised for in the past shouldn't & usually doesn't matter. You should be concerned with the current appraisal as compared to the similar homes in the same area that have sold in the past 3-6 months. Is your current appraisal higher or lower than other similar homes in the same area that have sold in the past 3-6 months? Regardless, you will not be able to get a loan on the property if the appraisal is less than the purchase price.

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PAUL WELDEN
HomeSmart
Buyer's Agent
Web Reference:  http://CheapPhoenixHomes.com
2 votes
Dp2, , Virginia
Fri Jan 30, 2009
The only appraisal that matters for your deal is the one that your lender will order--provided you intend to obtain financing. The only other appraisal that might matter is one that you'd order independently.

Hopefully, if you already have this property under contract, then you're represented and your contract contains an appraisal contingency. If so, then you can approach the seller to readjust your offer price, or you can opt out of the contract using your appraisal contingency. However, if your property is under contract, and your contract didn't have an appraisal contingency, then you might still have a few other options if you're represented. Yet, if your property is under contract, your contract didn't have an appraisal contingency, and you're unrepresented, then it's time for you to see an attorney to review your remaining options.

If your target property isn't currently under contract, then make sure to present your offer with an offer price no greater than the appraised value of that property.
1 vote
Penny O'Brien, Agent, Las Vegas, NV
Fri Jan 30, 2009
You don't have to worry as long as the price gets adjusted. i would make sure you have someone write up an addendum that will need signuatures by the bank to ok the price difference. do not take any chances on thinking the bank will adjust it without your addressing the situation.. You need to act quickly on this because it can affect your loan process. Actually, your lender should be talking with your Realtor to address the situation.. Act now.. i hope this is of help to you.
1 vote
MAP1922, Other Pro, Newport, OR
Fri Jan 30, 2009
Three months time in this market is a long time. Unfortunately you are purchasing at a time when home values are continuing to depreciate. Is this a primary residence? If so, be sure this is the best property in the neighborhood for the price. Remember - in time, property will appreciate. Ask the realtor for current property valuations and ask for your attorney's opinion.
Best wishes,
Michele
Web Reference:  http://www.mpetersesq.com
1 vote
Carlos Ramir…, Agent, Mesa, AZ
Fri Jan 30, 2009
Denise,

It depends on you. Some might say you should be happy!

It is impossible to time the exact bottom of the market, and those who try most probably will end up missing it - as we will only know where the bottom is after it has passed and it might be too late. With that said, there is a chance that the property might still depreciate some more - nobody knows for sure! But I can almost guarantee you that it will be a good investment in the long run. If you are buying to flip in the near future, it is a bad idea to buy now. If you are buying as a long term investment or personal residence - you can not go wrong buying now!

* Just remember never to pay over the most recent appraised value - which you are not doing anyway!

Good luck!

Carlos
ABR - Accredited Buyer Representative
Web Reference:  http://www.SmartAZRealty.com
0 votes
Linda Bagley, Agent, Seattle, WA
Fri Jan 30, 2009
Denise,

The home must appraise to get financing and values have not been going up. On the contrary! Your lender (if financing) may not approve the loan and you would have wasted the money you will be paying for an appraisal (aprox. $450.00)

In any event you should be renegotiating the offer based on the older appraised value at the very least. You need to read the clause in the offer that addresses the appraised value.

Do not ignore the appraisal. It is your agents fiduciary responsibility to see that you are not buying a home that is over priced, no matter who is selling it...

Be careful!
0 votes
Lucinda Tkach, , Phoenix, AZ
Fri Jan 30, 2009
Denise,

Home values continue to decline! Like agents appraisers rely on recent sales to determine the value of a home.

You may also ask for a reduction in price if it comes back less than you offer or close to your offer.

I hope this helps! However you must research the property history too!
0 votes
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