My neighbor (identical house structure) just sold their house way below market value. My house is upgraded

Asked by Sarah, Doral, FL Thu Aug 6, 2009

inside, but basically the same house. If I have a buyer who is willing to pay $35K more than the last home sold (just a couple weeks ago) will I be able to get it appraised high enough? How does that work? My buyers will put 20% down. Any ideas? Thanks!

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Louise Warri…, , Lake Mary, FL
Fri Aug 7, 2009
Hi Sarah --

The home that recently sold below market value will hurt you, but how much depends upon how many others have sold recently in our neighborhood. If your neighbor's home was in foreclosure and was sold short, but there were several others that sold around the same time for a higher value (that were not in foreclosure), then it won't be as bad. Appraisers (and lenders) will allow for the fact that one of the comps is a foreclosure and not discount the value too much. If, on the other hand, there have been very few sales and the only things to sell are foreclosures, I think you'll probably have trouble when your buyer's mortgage company does an appraisal.

If your buyer is willing to pay the difference between the appraisal and the sales price, you can still sell it. Most buyers won't do this, though, and the seller either takes the home off the market or reduces the sales price to the appraisal. You can, of course, contest the appraisal but I rarely see this being successful unless the appraiser was comping in the totally wrong location and made egregious errors.

I have seen the appraisal come in less conservatively if the buyer is putting 30-40% down (and therefore isn't an insured loan) so my best advice would be to find someone who has more cash to put down.

One other thing: There's lots of talk about houses "selling way below market value". Market value is set by where houses are selling. If they continue to sell for lower and lower prices, THAT becomes the market value. We've been in a downward spiral and it has made for some very trying times for home sellers.

The best thing to do is not sell if you don't have to. If you can't bear the loss, consider staying put, or renting it if you have to move away, until the market improves. If you're moving up in home value (e.g., from a $200K house to a $500K house), the hit is a lot more palatable: housing currently is a down a percentage from where it was (say 20% for easy math). 20% of 200,000 equals $40,000 that you will "lose" on the sale of your home, however you'll be able to "gain" that same 20% ($100,000) on your purchase.

Get the advice and counsel of a good agent in your area. If you'd like me to send you the name of a great Coldwell Banker agent in Doral, just call me.

Best of luck!

Louise Warring, e-PRO, CSP, CNS
Certified Short Sale Professional
Coldwell Banker Residential Real Estate
1 vote
Tom Sommers, Agent, Lakeville, MN
Thu Dec 5, 2013
If you can show the appraiser all of the upgrades you have done along with the dollar amounts you may be able to get the extra value. If not that sale could really impact your home. The appraisal has to come back at the sale price or above. If it doesn't the bank will not lend the buyers the money. Your realtor should be able to prepare a package of information for the appraiser that details all of the upgrades.

Good luck,

Tom
0 votes
Mi Casa South…, Agent, Miami, FL
Thu Dec 5, 2013
Hello Sarah,


Doral market is very good with rentals if your house is not appraised for the value that you want. I would recommend to wait. In a comparative market analysis the house that sold for less is going to affect the value of your house, you could also get the house appraised and then make your decision based on it. If you have to move Doral is a very good market for rentals. If you have more questions feel free to contact me!

Have a Nice Day,
Sarai Morales
4737981@gmail.com
0 votes
Bill Eckler, Agent, Venice, FL
Mon Aug 10, 2009
Sarah,

More buyers should be going through the same thought process you are.....considering what the home they are purchasing will appraise for. With today's market adjusting regularly values of homes are being effected drastically.

The appraisal of a home is based on more than the last home sold.....appraisers need to use several comparison homes to justify their final number. If your area has other comps that support higher numbers, a higher sale price may be able to be supported. On the other hand, if other sales are lower in nature you can depend on the buyer having difficulty with financing.

Our recommendation is to consult your real estate professional for complete and accurate comparison properties to use as a basis for you to be best prepared.

Good luck
The Eckler Team
0 votes
Nelly Andrus…, Agent, Whitestone, NY
Thu Aug 6, 2009
Hire an independent appraiser to appraise your house .
Do you absolutely have to sell your house?
If the answer is yes, then sell it for whatever market bears.
If the answer is "No", wait for another 5 years when market might be back up
Nelly
0 votes
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