i'm a first time home buyer. I am in contract to purchase a home. The valuation has just been set at the same

Asked by Rick, Florida Mon Apr 21, 2008

as the purchase price. I estimated my purchase with zillow however the back came in at appox 30 k less. is this common? Am i getting duped? i feel like i am not taking advantage of the buyers market with this appraisal.

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Dianne Scott, Agent, Eustis, FL
Mon Apr 21, 2008
Hi Rick,

It is difficult to comment on your appraisal, because I am not familiar with your area, but I do know that appraisers are being pretty conservative in their valuations these days. If you came in at contract price, you are ahead of the game. I don't know if you are working with a Realtor or not, but if so, he or she should be able to go over the homes that were used as comparable sales with you. You need to contact your lender to see if they will provide you with a copy of the appraisal. That way you can see what homes they used and if, and how, they made the adjustments to come up with that price. Also, if you are financing the home, chances are the lender will put the appraisal through at least one appraisal review, and quite possibly more than one. They will not lend you money on a home if they feel it does not have a reasonable expectation to hold its value over the life of the loan.

As far as Zillow.com is concerned, if you will read their disclosures, they tell you that their valuations are not guaranteed. For example, I had a home listed that was a 1965 home with no garage, a second bath in a laundry room that was added into a closet, and window air, in an older section of town. When you pulled the property up on Zillow, they compared it to new homes in a brand new retirement community with a marina, a luxury clubhouse and Olympic-sized pool that overlooked a 16,000 acre lake. When I look at Zillow, I select out the homes from the ones Zillow gives that compare closely to the one I am trying to get a valuation on. They strictly go by area and square footage, with no adjustments for age, condition, lot size, etc.

Most appraisers won't appraise a home for more than contract price anymore. Also, in some cases, they can't because of lender guidelines. By not doing so, it gives them an extra measure of security, also, just in case their judgment of the value ever comes into question. If you want to get a real deal, you have to find a Seller who is willing to take less money than similar homes in the area were selling for. More than likely, if it wasn't a Buyer's market right now, you would never have gotten the home for the price you did, because the values are down. Also, if the market values weren't down, you also would not get as good of an interest rate as you are probably getting on your loan. I'm pretty sure you will probably do o.k., so don't let this discourage you.

Good luck in your new home!
Web Reference:  http://www.DianneScott.com
1 vote
John Miller, , 78660
Mon Apr 21, 2008
The bank appraisal is based on past sales that are more than likely from the MLS which has data that is updated daily. If there have been sales that are recent and not updated where Zillow gets its information then Zillow will not be as accurate as the appraisal the bank did. Use Zillo to get ideas. Use a buyer agent to get results. Best of luck on your future deals. Also, The price you pay is based on what you determined you were happy with after seeing other similar properties. If this is the most attractive based on other options you made the right choice.
Web Reference:  http://WWW.Exitinaustin.com
1 vote
Tomi Kuczyns…, Agent, Fort lauderdale, FL
Sat Aug 11, 2012
Appraisals are still very challenging and conservative. First I would ask if your agent showed you comparables before you decided on an offering price. If so, and the comparables where within 6 months and true comparables for the property, it may be of benefit to forward them to the appraiser. In most situations though, an appraiser will not change their valuation. Depending on the type of financing, you may want to consider having a second appraisal completed - but first look at the appraisal carefully with your Realtor and consider the comparables used and adjustments made to see if they look out of balance. If they don't, a second appraisal would simply be a waste of money.

On another note to consider, if the appraisal appears in line with the comparables, you may want to try and renegotiate with the Seller. This can some times be achieved. A consideration for the Seller is if your appraisal is for FHA financing, the appraisal is attached to the property for a 6 month period. So the Seller would be unable to sell to another FHA buyer for their current price. They would need to find a cash buyer, or a buyer utilizing conventional financing with a substantial down payment.
0 votes
Marsha Umans…, Agent, Tamarac, FL
Sat Apr 21, 2012
If your home appraised at the purchase value - means you ARE buying at the right price, and you ARE taking advantage of today's market, which is not exactly a Buyer's market anymore. Zillow - is not a standard, and you cannot go by it. Your Lender who is giving you a loan has ordered an independent appraisal to make sure he is not over-lending to you - so you have nothing to worry about.
I hope you like the house you are buying, and if it is first, the second one will be even better.

Feel good about becoming a home owner! You are lucky to be in a position to buy in this market!

Marsha Umansky
PRAG Realtors, Inc.
0 votes
Gary Anderson, Agent, Fort Lauderdale, FL
Wed Apr 23, 2008
Hi Rick, Zillow is statistical in nature and just combines databases that are readily available. Review your appraisal and contract. Look at the most recent sales in that appraisal. If your contract has a contigency that may allow you to cancel then you could possibly have options. Remember Zillow never physically looked at the house. One more thing, It's a buyers market! Best wishes.
0 votes
Paul Mcnamara, Agent, Fitchburg, MA
Wed Apr 23, 2008
In general Zillow offers a value for your home with information taken in part from the municipal board of assessor’s records which may or may not be a true market valuation. Many assessments from the Municipality are behind the market trends, meaning in good times when homes are appreciating in value your taxes are lower because the City or Town where you live may not have completed an assessment of your home within the last six months. Traditionally assessment values are within thirty-six months of the actual market. In a real estate market which is transitioning from appreciating to a depreciating or vise versa you will have a significant difference between the market value and the assessment value of your property.

Two things I would immediately do is seek the advice of a REALTOR and a real estate attorney in your State.
0 votes
Phil Fowler, Agent, Brandon, FL
Mon Apr 21, 2008
Hello Rick,

Did you use an experience Realtor to represent you in the transaction? Zillow is an interesting website, but does not take the place of an experience professional who will do a market analysis taking into consideration, solds, expireds and foreclosures in the area.

Unfortunatley, you are under contract and the property has appraised.

Web Reference:  http://www.PhilFowler.com
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