The lender will not allow the homeowner to use their own appraiser for the loan, as per your #5. Why would she need to talk to the appraiser? An appraiser can not and should not ever talk to the homeowner regarding value (if that's what you meant). It is against USPAP regulations and they could lose their license. The best bet is for the homeowner to type up a list of the improvements and then give those to the appraiser. At least he/she can then have a list in front of them when making adjustments. (Hopefully, this is what you meant. :) ) But never talk to the appraiser about value. Big no-no!!
First I can see you had no representation and felt you knew how to control every thing. Now you ask the very people you did not think could help you to get you out of a mess. And may I say some would get you in deeper. You do not talk to the appraisers or the lenders of your buyers - who are you the mortgage broker?
You spent the money that seller should spend in order to have a prompt sell of his/her property.
YOU CLEANED UP. The square footage was the same, the neighborhood was the same.
You really had no change other than visual, unless things were deterioted to the point that an appraiser
would mark off on the property.
If you feel your home is more attractive than the others on the block that is great, and if it is it will sell faster and prehaps for a little more. BUT you do not try to make your home look like the homes in the neighborhood down the road because their homes sell for 25% mors and expect that return. An appraiser must use comps from the same subdivision if they exist.
Please contact a professional Realtor personally, but we are not allowed to answer legal questions, you need an Attorney for your recourse, you need a Realtor to sell your home.
As they say you have a Mell of whatever, Good Luck
Thanks, Todd Norsted
OK, here's another option--can you renegotiate the contract, or have the buyers gone bye-bye? If the buyer wants the home, and you conceded some buyer closing costs that the buyer is able to bear, you may be able to at least mitigate your losses by lowering the cost and eliminating the concessions. You should be able to do this by lowering the price by only $5K.
b) If the send appraisal was only paid for as a drive by appraisal not a full appraisal can have some reduction in price for they did not preview the property,
c) Did you compare the sq. ft. I was the listing agent on a property, that I sold to my clients a few years earlier, I had the past file, the new buyer appraisal came in 800 sq. ft less than 2 years prior... it caused all kinds of problems I provided proof did a full blown review, and the appraiser REFUSED to return an remeasure the house, the listing agent, myself, brokers made all kinds of attempts, the buyer was going to loss money the bank would not lend the money, there was a significant difference based on sq. ft. we had to cancel the sale of the property with the buyer. AND GUESS WHAT THE NEXT APPRAISAL came in with the correct sq. ft. from 2 years prior, builder plans, tax rolls.
You need to compare all author statements, your listing agent should be able to detail the reports for you.
Sorry to hear what happened
Does your house back up to the lake? if so I have a relo client that would love Highland Village however wont' purchase a home unless it lake view. If so contact my office.
Although the second appraisal was performed by an "apprentice", you must understand that the appraisal itself was signed off on by a Certified Residential Appraiser. The CRA had to look over the appraisal and make sure that it was correct before he/she signed off. What you must do is look at the sales comps that the appraiser used and determine if they are comparable to your property. Do they have all the same amenities that you say that your home has. The appraiser must use sales comps that he/she feels are comparable to your property or make adjustments for those things that are different. If you don't think that they are then you can supply comps that you feel are more comparable for review and re-consideration. However, please be aware that they must have sold within the last 3 months (you can go up to a sales date of a year, but if there is a newer sale it has to be taken into consideration first), it has to be within 20% of your square footage (less the garage), you should have comps that are about the same size, one a little smaller, and one a little bigger (if possible), and all sales prices have to be within a 20% range of each other. If you live in a suburban area, they must come from within a one mile radius. If that isn't possible then as close as possible. However, please remember that the appraiser can not overlook comps that are there because you need to make a specified value. That is against USPAP regulations and they can lose their license. So there are lots of rules and regulations that an appraiser must follow to determine your value. Was there a lot of time between the first and second appraisal? There could have been more sales in between the two that the second appraiser needed to use. Just a thought. Hope that this helps. My husband is a Certified Residential Appraiser, so I have an inside look at what they go through. If you have any questions, feel free to write me at email@example.com or post here on Trulia, and I will respond as well. Thanks so much and good luck!!
One thing that I'm not clear about, is why there were 2 appraisals done to start with. Typically, the bank orders one and that is it. Was it because of the low value on the first one? The second question is in regards to second appraisal that came in even lower. You stated that no one came through the property, yet it was an apprentice. So was it a desktop appraisal, and who actually signed off on the appraisal? Was it just the apprentice, because if he was actually an apprentice, then there must be another signature from the Certified Residential Appraiser that sponsors him. If there is not a second signature, then I would contest the second appraisal (if he is truly an apprentice.) Good luck!
Was the Realtor present when the appraisal was done?
Did you Realtor offer additional comparable sales?
You have some great advice so far. If the answer is "no" to any of these questions above, you might want to see if you can use them to remedy your situation Remember that how much your invest in improvements does not translate into dollar for dollar value.
#1. Ask appraiser #2 to come back and reappraise with a walk-thru and with the boss.
#2. What did they use for comps. They are on the appraisal. Can you do your own drive by and see
if they are comparable homes? If not maybe you or your realtor could suggest homes you/they think are appropriate comparables.
#3. Can the buyer still buy the house even with the lower appraisal? Sometimes they can fund the difference in the loan limits or are they trying to push the price down to match the appraisal?
#4. If they are doing one loan can you take a second for the difference if that is needed?
#5. You might pay for your own appraisal using an appraiser from the bank approved list and see what they say. Be sure to speak to the appraiser when they visit.
There are lots of different options. Now this is probably what you don't want to hear, but is it possible you over improved the property? I'm think of a situation in Grapevine right now where every house in the neighborhood was built in the 50s and is in the $100,000 price range. An investor came in a purchased one of these and decked it out similar to what you describe. He paid $70, probably put $30 into it and now wants $160k. I think in this instance it won't appraise anywhere close to $160k...even if you could find someone willing to pay it. I'm not saying that is your situation, but is it possible?
As Scott said, if you have to sell right now, you may have to cut your losses. IF NOT, let the buyer know that YOU have already agreed upon the price. It is up to them to get the money in order to buy the house at that price.