Appraisal quashed the deal

Asked by Damselfly2, Lowell, MA Mon Nov 17, 2008

I am selling my condo for a price that falls right in the middle of recently sold comps in my building. Not to mentio, my unit has 10K in upgrades. Signed purchase and sale on friday. today, buyer says motgage co says FHA appraied the value 10K below selling price. the 2009 real estate tax appraisal for my condo is already 'modified' to reflect the declining market and even THAT value is 5K higher than the bank's appraisal! what's the story here? what can be done. I cann't lower the price. i was selling FSBO because i could not afford the commission...

Help the community by answering this question:

+ web reference
Web reference:

Answers

14
Donovan, Home Buyer, 80017
Sun Mar 22, 2009
since it was an fha appraisal, isnt it stuck (e.g. appraised value) for 6 months? is it even possible to get another appraisal?
0 votes
Shelley Dudl…, Agent, Rockwall, TX
Sun Nov 23, 2008
Did you contact the appraiser? If not I would suggest you try, they generally want to make the deal work, appraisers that squash deals generally don't stay on the banks list long. Also, the buyer could ask the mortgage company to get another appraisal, I am sorry to hear about your situation. You might consider contacting a local agent to watch the sales for you and notify you when sales improve, it might just take a couple sales to get you where you need to be value wise. Best of luck to you. I wish I was in your area and could be of more assistance.
0 votes
Sloan Bee, Both Buyer And Seller, Lowell, MA
Sun Nov 23, 2008
No. i refused to lower my price to the appraisal value and so the deal is dead. i did receive a copy of the appraisal which i guess for the boston area's 'declining market' de-values a property at a rate of 1.5% for every month on the market within a 6 month period. so basically, i lost 10K from the day i listed my condo and no amount of upgrades would make up that loss. i would imagine this market will only appeal to the hopeless who have no other alternative but to 'give away' their property.
thankfully, i'm in no rush. i can afford to wait out the market - so that 's what i will do.
thanks for all the answers!
0 votes
Shelley Dudl…, Agent, Rockwall, TX
Sun Nov 23, 2008
Just checking to see out this worked out. Did you get it resolved?
0 votes
David Chambe…, , Saint Petersburg, FL
Sun Nov 23, 2008
what date was the contract? the appraisal seems to have come in fast?
0 votes
Ken Lambert, , Exeter, NH
Sun Nov 23, 2008
Hello Damselfly2- Good answers below. I agree- locate comps yourself and appeal the appraisal value. If you give the same property to 3 different appraisers, you will get 3 different values in most cases. So there is almost always some room for interpretation.
If the buyer is OK with the slightly less appraisal value, you could offer a small 2nd private mortgage on the difference between the appraisal and the purchase price- in most scenarios.
I've put together a list of 10 key homeselling tips. If you're interested, please contact me at your leisure. Thanks, and Good Luck,
Ken L.
0 votes
NonRealtor, , 23456
Fri Nov 21, 2008
Keep the condo, if you can afford it. You like it, that's why you bought it. Good Luck
0 votes
Andrea Mills, Agent, Sebring, FL
Fri Nov 21, 2008
When we get an offer on our listings, we make sure that we do have rock solid comps and we are actually present for the appraisal. Like Barbara already said, the appraiser might not be from the area and not familiar with that particular market. On top of that, we like to make sure the appraiser isn't going to do just a"drive-by" and then pull some numbers out of the magic box.
0 votes
Barbara King…, , Ocala, FL
Fri Nov 21, 2008
You may want to get in touch with the appraiser and see what and how he got his comps. He may be from another area and hasn't seen all there is in your area. Show him all the data you have on your home and see if he can get the price up some. It's very hard at this time to get real good comps. You may not get what your looking for. Also, if the buyer really wants your home they may want to make up the difference, not sure if that will work but maybe.
0 votes
..., , Lexington, MA
Fri Nov 21, 2008
Unfortunately appraised values impact just about every deal these days, especially in a region classified as a "declining market." Appraised values are time sensitive so another appraisal may improve things if there were some higher-priced recent sales down the road. Likewise, you risk a few foreclosures being sold to further depress recent sale prices.

We find lenders to be negotiable on payoff balances if the seller is facing trouble - the buyer's attorney should be experienced enough in short sales to present the facts to your lender and negotiate a settlement. Also, if the buyer is in a position to make up the difference they may still purchase the home for the sale price - FHA will finance up to 97% of the lower appraised value and the buyer will need to fund the difference betwen that and the agreed sale price. That's a less likely scenario, so start with getting someone to talk to your bank about the reality of the market because if they foreclose they'll fact the same dilemma plus added expenses.

Tom Stevens
Eagle Nationwide Mortgage, Natick, MA
Thomas.Stevens@ENMCdirect.com
phone 888-4-1-lowrate x 25 (888-415-6972 x 25)
TomStevensMortgageConsulting.com
0 votes
Jim Starwalt, Agent, Grayslake, IL
Fri Nov 21, 2008
You should definately appeal the Appraisal. Send comps. to the lender yourself. How does the buyer feel about this situation? Are they being cooperative, or are they feeling insecure about the contract price after seeing the appraisal?
Get the buyer on your side and fight it.

Good luck, Jim
0 votes
Jack Vollenb…, Agent, Flemington, NJ
Fri Nov 21, 2008
Hi Damselfly,

It appears you already answered yourself here. You're saying you can't lower the price. The appraisal is coming in conservatively which really is the only way to price it in a declining market from the bank's point of view. The story is that the longer you wait to sell, the lower you may have to go in order to actually close.

My advice is to have the buyer appeal the appraisal report armed with as many and as recent comparable unit sales prices in your building as possible. The bank usually has a procedure in place for that. The appraiser may readjust or they may not. If they don't, you will have to decide if selling it now for a lower price with a sure buyer is worth 10k versus riding the entire listing and showing process again.

Ordering a new appraisal from a different appraiser can actually harm you as they may also come in lower than your current one. Good luck and let me know if you have any further questions.

Sincerely,

Jacobus "Jack" Vollenberg
RE Appraiser/RE Sales Associate
Vollenberg Appraisers/ERA Statewide Realty
Vollenberg@iname.com
0 votes
Wendy Rocca, Agent, Newton, MA
Fri Nov 21, 2008
You should ask the bank to send another appraiser. Opinions vary.
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Mon Nov 17, 2008
I'm so sorry to hear that!! Condos are a tricky area right now, particularly with FHA loans. FHA is not known as being condo friendly for the most part. In a declining market, a good rule of thumb is to price your home 5% below what currently listed comps are, not the solds. If you have solds that are strong and back up your purchase price, you may want to contact the appraiser and talk to them about it. The underwriter has more say about whether the loan goes through or not though. Unfortunately, your tax appraisal means absolutely nothing for market value. The city/county assessor doesn't impact what someone is willing to pay, only what your taxes will be.

I'd love to be able to help you out, even if only to answer your questions and offer some advice. Feel free to email or call me.

Best wishes,
Danielle
Web Reference:  http://www.daniellesharp.com
0 votes
Search Advice
Search
Ask our community a question
Home Selling in Popular Lowell Neighborhoods

Email me when…

Learn more