How Home Appraisal Affects Selling Price

Table of Content

• How long does it take to close after appraisal?
• Appraised value is lower than the sales price = bad
• Do appraisals usually come in at asking price?
• Higher Appraised Value Strategies to Include Closing Costs
• What happens if appraisal comes back higher than purchase price?
• of the Best Real Estate Investment Locations in Oregon
• When the appraisal is higher than purchase price?

So that’s when a second round of negotiations can begin. The ball’s in the seller’s court here — it’s up to you to decide if you’re willing to renegotiate the sale price so that it aligns with the appraisal outcome. Appraisals are a standard part of the home-buying process, and they protect the buyer’s lender from offering too much money for a home that isn’t worth the cost. While this may seem like a formality, in hot real estate markets, bidding wars can drive home sale prices well above the true value, which is a red flag for lenders. I’ve never seen anything wrong with putting a lot of weight on the subject’s contract sales price, provided it’s an arms length transaction. What’s tricky is knowing whether the buyer is “knowledgeable” or not, especially about substitute properties that are available.

Knowing the pending contract price prior to completing an appraisal is one thing… completing a proper analysis of the purchase agreement during the development of an appraisal report is another. In my rural market area where there is no public disclosure of real estate sales, appraisers rely heavily on sales data available from the real estate agents. Once these details of a pending sale are properly researched and analyzed, the pending contract price becomes a strong indicator of current market value .

How long does it take to close after appraisal?

Both of these houses are in a new phase in a subdivision. Same floor plan,basically same house just built by different GC’s. Your posts demonstrate that you haven’t a clue as to what is SUPPOSED to go into an appraisal. This massive response was typed in a tiny little text box, which made it very difficult to edit, but nonetheless, my point comes through loud and clear.

Likewise, ordering a new appraisal is no guarantee of a higher value, and you’ll be on the hook for two appraisal bills. Appraisal contingencies are also sometimes used to renegotiate or exit contracts after an appraiser identifies required repairs, such as chipped paint or cracked windows. Not even a month later, the President publicly accuses me of stealing money from him and defrauding him based on zero evidence. Of course, I denied the false allegations and requested proof of the accusations, which he refused to provide. Then, he fired me and issued my final paycheck to me. Logically, why does an employer issue a terminated employee their last paycheck when he accuses the employee of previously stealing money from him?

Appraised value is lower than the sales price = bad

Then, the Operations Manager tells me that he just talked to the appraiser on the phone and she is going to amend her report with the comparable to support the purchase price. It was terrible to see our clients upset with honest, ethical, and accurate appraisal reviews. But, I refused to compromise my morals and ethics for an increase in orders. Upper Management began to alienate and harass me on a daily basis during this period.

If the seller refuses to negotiate down the sales price of the home, the buyer would only be able to get a mortgage for $800,000 and they would owe the seller $75,000 in cash upfront in order to purchase the home. It’s best for both parties if the appraised value ends up being similar to the price negotiated by the buyer when they made their offer. Or, if you’re in a hurry to sell, you may consider relisting with a lower starting sale price next time around. You’ll also want to point out exactly which parts of the appraisal are being disputed.

Do appraisals usually come in at asking price?

How can you realistically compare homes if the only comps were sold way below value because of foreclosures, and short sales? We have one comp that actually sold for it’s actual value in the last 6mo witthin our little town, but if the appraiser goes out another miles in the same county they will find a hundred. The last appraiser wouldnt do it and so we couldn’t refinance, because there were not enough comps. Now sitting here worried because we are waiting on an appraisal to sell it, although it the contract is 35k less than the last appraisal that was completed in may 2009, after the bubble burst. Again, you might be the diamond in the rough here, but out of 5 appraisers I have worked with in the past 4 years, only 1 has provided an accurate appraisal that was truly true to current market conditions. Upon researching the issue, I find boatloads of websites/articles/complaints of much of the same, which I highly doubt it coincidence.

And when the lenders took easy credit and teaser mortgage rates away, almost overnite, demand plummeted. Many buyers were speculating and willing to pay ever higher prices so they could get rich quick owning real estate. When I reviewed the purchase contract, I had a gut feeling that something funny was happening because the buyer and seller didn’t fill out the address section of the contract. That and the fact that the home was in contract for about $20,000 higher than the other homes in the area that were similar in condition and appeal. Now $20K might not be much in some areas but when the property is only worth $40K then that is a huge difference.

Higher Appraised Value Strategies to Include Closing Costs

Your real estate agent may have listed the home too high. In this case, you may want to lower your asking price. It might be hard to find buyers who will kick in thousands of extra dollars to cover the difference, even in a seller’s market. As time passed and I completed my coursework, I began to see what was really going on at this company.

You can still NOT KNOW the purchase price of the home, and add/subtract those values from a TRUE unbiased market appraisal. If you sell to a buyer with financing, their lender will order another appraisal before closing to protect themselves from lending more than the house is worth. In that case, it’s ideal to list right at the appraised value, or even a little under, so the deal goes smoothly. But if you have a cash buyer, they’re not beholden to a lender’s appraisal, so they can offer whatever amount they want. Maybe you didn’t do everything you could to prepare your home for the appraisal and you feel the appraiser made a mistake.

Accept the lower mortgage valuation and put in a higher deposit. Finally, this equity boost will only help you down the road if or when you plan to sell the home — you’ll be in a good position to profit more from the transaction. You’ll also be able to qualify for a home equity loan faster, which can be helpful if you’re planning home upgrades or other big-ticket expenses and need extra cash. The appraisal is one of the first steps that happens during the escrow or settlement process, as the report could significantly affect the transaction. Make a cash offer now, and Orchard will sell your old home after you move.

The comps are not perfect and the sale price is not perfect. There seem to be a few knowledgeable appraisers here. My question is regarding a recent appraisal i have for a new purchase. I happened to notice that the 3 comparative sales came in at $88 per sqr ft, $84 per sqr ft, and $77 per sqr ft; yet my house was appraised at $61 per sqr ft to come in at $2k above the agreed upon sale price. As a buyer, i was expecting an honest estimated property value and not just a cost justification for the mortgage company. It appears to me that, based on every comparable sale, my estimate was intentionally lowballed to ensure that i pay PMI insurance as the equity is determined by the estimated value of the property.

The proverbial straw that broke the camel’s back was when a client questioned me about an appraisal review completed 18 months prior when I just started working at the company. The loan went bad and the bank was foreclosing on the home. In addition, the appraisal value and review appraisal value coincided with the purchase price.

Good article, I have said many of the same things in my blog. When doing an appraisal for a purchase and a loan, the appraisers job is not to protect the buyer, unless the buyer is the client . The appraisers job is to protect the lender or those parties involved with the loan . Just as there are worthless agents, so too are there worthless appraisers. The difference is that there are multiple checks on appraisers that ultimately filter them. There are ZERO checks on the sales side, no one cares.