Sellers rights for incorrect FHA appraisal

Asked by km265, Farmington, CT Fri May 10, 2013

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6
Ron Thomas, Agent, Fresno, CA
Fri May 10, 2013
It would be nice if you gave a few more details to help with your case:
We can only work with what you have given us; assume the rest:

You are angry and frustrated because the Appraisal came in lower than the Offered price; which means that both you and the Buyer are valuing the house at higher than Market.
Unfortunate for you; most Appraisals are really close to Market; the Bank really wants the deal to go through; they really do.
So, if you won't lower your asking price, you are telling the Buyer that you are standing firm, and won't sell. The Buyer probably has no choice; they will go away.
So, the Buyer is out some money and you have to start over again.
Oh, and there is no such thing as "Seller's Rights".
1 vote
Mack McCoy, Agent, Seattle, WA
Sun May 12, 2013
As Ron Thomas says, Sellers have no rights concerning FHA appraisals.
0 votes
lb1373, Agent, Pomfret Center, CT
Sun May 12, 2013
I agree with Jessica Beganski, the word "incorrect" needs to be given definition. Remember that an appraisal is an opinion of value. A CMA is also an opinion of value but the appraiser has adjustments, plus or minus, that helps to give a more definitive and unemotional value. Is your property truly comparable to other properties that have sold at your price point? If so, then hire your own appraisal but make sure you tell the appraiser that the loan hanging in the balance is an FHA loan. That way you will be comparing apples to apples.
0 votes
Jessica Bega…, Agent, Avon, CT
Fri May 10, 2013
When you say incorrect, do you mean the appraiser missed important facts - e.g. square footage is incorrect or number of baths/bedrooms wrong? Or are the errors more subjective?

Appraisers are human beings and can get information wrong. It is up to the buyer's agent/buyer to argue the appraisal and show why it is wrong. The listing agent can certainly give input. If the buyer comes back for a price reduction, you may be able to argue for a new appraisal if the buyer is willing to proceed. You may also be able to argue for a desk review, where one appraiser is brought in to review the original appraisal.

Talk to your agent. Good luck!
0 votes
Seth Winklem…, Agent, Bristol, CT
Fri May 10, 2013
Sometimes agents have to "prove" to the appraiser that his comps were wrong. See if the buyer's agent has looked at the appraisal. Sometimes comps are hard to pull in certain areas.
0 votes
Carol Presut…, Agent, Bristol, CT
Fri May 10, 2013
Appraisals can be challenged and some banks will allow it. It is up to the buyer, however, to instruct for a new appraisal. It has been my experience that the seller paid for the 2nd appraisal. We saw this happen quite often when markets started to escalate and the appraiser is not catching up. We see this very often when short sales lender gets an appraisal higher than our market price. Always frustrating, but many banks are willing to listen.
0 votes
How can a seller challenge a low appraisal if they have no right to see it. What happens when appraiser consistently comes in "low ball" and somehow all the sellers get calls offering "quick cash purchases"
Flag Mon Jun 27, 2016
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