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Message
How accurate is a home appraisal for the mortgage company?
Posted on 11/20/20 at 2:42 pm
Posted on 11/20/20 at 2:42 pm
My home appraised for $235k, which conveniently was the exact price for the sale.
I’m a bit confused though and a bit dejected as I was expecting the appraisal to be higher. I’m wondering if it’s actually accurate.
The house across the street from me sold in 2018 for $295k. It was flipped and has a lot of upgrades, but it’s 350sqft smaller. It’s also a smaller lot and is on a downsloped hill.
The housing market in my area is booming right now. It’s not uncommon for homes to sell for higher than asking price and for many of them to get multiple offers the first day on the market.
While my house needs to be updated, why in the world could it be $55k less than a smaller house on the same block that sold two years ago when the market wasn’t as active as it is now?
Surely paint and new appliances can’t add that much to the value of a home, right?
Do appraisers just look to see if it’s worth the sales contract price and set it at that?
Edit - not that it really matters because these sites aren’t always accurate, but Zillow says my home estimate is $310k.
I’m a bit confused though and a bit dejected as I was expecting the appraisal to be higher. I’m wondering if it’s actually accurate.
The house across the street from me sold in 2018 for $295k. It was flipped and has a lot of upgrades, but it’s 350sqft smaller. It’s also a smaller lot and is on a downsloped hill.
The housing market in my area is booming right now. It’s not uncommon for homes to sell for higher than asking price and for many of them to get multiple offers the first day on the market.
While my house needs to be updated, why in the world could it be $55k less than a smaller house on the same block that sold two years ago when the market wasn’t as active as it is now?
Surely paint and new appliances can’t add that much to the value of a home, right?
Do appraisers just look to see if it’s worth the sales contract price and set it at that?
Edit - not that it really matters because these sites aren’t always accurate, but Zillow says my home estimate is $310k.
This post was edited on 11/20/20 at 2:47 pm
12
Posted on 11/20/20 at 2:54 pm to StringedInstruments
I guess just on its face why would the appraisal be any different than the sell price? If it was worth more wouldn’t someone else have offered a higher price?
Posted on 11/20/20 at 2:56 pm to StringedInstruments
If your house needs to be updated, but the house across the street was already updated prior to its last sale, then it’s not actually a comparable to your house.
Posted on 11/20/20 at 3:09 pm to StringedInstruments
quote:
My home appraised for $235k, which conveniently was the exact price for the sale.
Wait im confused here.
Are you selling your home and went under contract for $235 then they got it appraised and it appraised for $235?
If thats the case then didnt it appraise for what you thought it should be?
Maybe im miss understanding you
Posted on 11/20/20 at 3:11 pm to StringedInstruments
That's pretty typical for the appraisal to come in at or slightly above the sale price.
Technically, the appraiser should NOT even know what the contract price is. But it is usually known to the him/her.
I understand how you feel. You paid for the appraisal and wanted to know the current fair market value.
Not clear if you're selling or buying. Please clarify.
Technically, the appraiser should NOT even know what the contract price is. But it is usually known to the him/her.
I understand how you feel. You paid for the appraisal and wanted to know the current fair market value.
Not clear if you're selling or buying. Please clarify.
Posted on 11/20/20 at 4:04 pm to StringedInstruments
It’s because until you make the upgrades on the house, it won’t appraise are what a nicer “comp” will. It I certainly possible to put 20 into a home in the right area and get 50 more for it.
But as it is current, those assumptions won’t be made. Appearance means a lot.
But as it is current, those assumptions won’t be made. Appearance means a lot.
This post was edited on 11/20/20 at 4:05 pm
Posted on 11/20/20 at 4:24 pm to StringedInstruments
quote:
My home appraised for $235k, which conveniently was the exact price for the sale.
Majority of appraisals around here go for asking price. Most of the time if it changes, it goes down.
Posted on 11/20/20 at 4:41 pm to StringedInstruments
quote:
My home appraised for $235k, which conveniently was the exact price for the sale
Agent...
Posted on 11/20/20 at 7:51 pm to StringedInstruments
quote:
The house across the street from me sold in 2018 for $295k
Appraiser uses comps from the last 6-12 months. It’s also VERY arbitrary. We just closed on a flip that went through three contracts. 1805 sf, 3BR/2.5BA in a highly sought after area.
First contract was for $187, appraisal at $180, contract fell through- financing
2nd contract was for $180, appraisal at $155. We appealed the appraisal using the first appraisal as evidence, but got nothing, so we walked away.
3rd contract was for $187, appraisal came in at $187.
All within 90 days of each other.
Per our realtor, the biggest difference is who is financing the loan. VA loans typically come in way under (2nd loan). We would have closed the 1st deal had the loan not fallen through, but it all worked out for us in the end. I wouldn’t worry about comps and having ‘built in equity’ for a positive appraisal. Anything you need to take a loan out for is going to need a new appraisal, and you just hope your $495 is well spent.
Posted on 11/20/20 at 9:14 pm to StringedInstruments
Appraisers are a joke. All they do is work backwards, starting with the sales price.
Posted on 11/21/20 at 6:26 am to StringedInstruments
Are you moving? If you are not moving, then You want county assessment for taxes to be lower.
When you sell, they will do the comps, etc.
When you sell, they will do the comps, etc.
Posted on 11/21/20 at 11:54 am to StringedInstruments
Even though the appraisal is for the buyer it’s main purpose is to let the lender know the home is worth the sales price. Thus most appraisers are working towards that goal.
Posted on 11/23/20 at 8:31 am to StringedInstruments
Now, this is just my experience, but both times that I have paid an appraiser to review my house they have come back significantly higher value than what the bank's appraiser came up with.
I have done this twice on two different houses since 2014 and both times they were about 2 years exactly after the original purchase. Maybe this was somewhat expected in the market conditions, but both times it was a little surprising.
I'm wondering also if you hired an appraiser and specifically told them that you wanted a low value for the purposes of tax value evaluation, would they be able to "work" the numbers down. Maybe I'll try that next year since our county only does evaluations every 7 years.
I have done this twice on two different houses since 2014 and both times they were about 2 years exactly after the original purchase. Maybe this was somewhat expected in the market conditions, but both times it was a little surprising.
I'm wondering also if you hired an appraiser and specifically told them that you wanted a low value for the purposes of tax value evaluation, would they be able to "work" the numbers down. Maybe I'll try that next year since our county only does evaluations every 7 years.
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