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NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

Appraisal Value Issues :Update House is back in the market!

Got the appraisal back on the house we are selling and it's $11k under what we are selling for. Went through the appraisal report in detail and noticed the following things.

1. He states “The current market condition for the area is that of a stable to slowing market….”
- Is this accurate? What does he mean “stable to slowing”?

2. He listed that we got 1 inch of water and replaced the flooring and repainted the walls.
- This is not correct. We got no water in the 2016 flood and asked him to remove this. Do you think this will increase the appraised value at all?

3. For the comps he gave $1,500 value to a couple of them for having a fence, but don't see him giving us this add back on our home.
- Is this normal?

4. He pulled 4 comps. 3 of them from 5-7 months ago and 1 from a month ago. You guessed it, the older ones were all much lower and the one from a month ago was even higher than what we are asking per sq ft.
- Surely the market has changed a lot in 5 months right? Since then construction costs have went up significantly.


Our realtor is currently fighting all of these things for us and we are waiting to hear back. I'd appreciate any feedback or advice yall can give. Hopefully the last time we ever do this because the home we are buying is our forever home.

Realistically we are hoping the appraisal goes up then we split the difference with the buyer.

Also: I should note the buyer is getting an FHA loan, which means they get a special type of appraisal. I looked it up and only the lender can ask for a 2nd appraisal for FHA loans and they will only due it if the appraisal had a ton of errors and the appraiser refuses to fix them. Appraisal is good for 90 days.


Update 6/12: challenged appraisal and nothing changed. We dropped our price $11k to match appraisal but took out paying $6k closing costs. Now buyer and their realtor have gone radio silent for two days. Our guess is buyer can’t afford closing costs of any kind. Now want a super quick sale and close.
This post was edited on 6/12 at 1:04 pm


Auburn80
Auburn Fan
Backwater, TN
Member since Nov 2017
4897 posts

If his #2 comment is wrong, it should help you. Water damage is never going to help an appraisal, so if it didn't happen you should be higher.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

Man I hope you're right. I spoke to a realtor family member in Florida for a little advice and they think this would make our appraised value go way up. However, he's in Florida where they don't exactly understand the flooding vs non-flooding situations like we do here in LA.


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10
SDVTiger
Hawaii Fan
Cabo San Lucas
Member since Nov 2011
60826 posts

quote:

should note the buyer is getting an FHA loan, which means they get a special type of appraisal


They get an FHA appraisal. It is not special


LSUGUMBO
New Orleans Saints Fan
Shreveport, LA
Member since Sep 2005
7389 posts

I hope your appraiser is better than ours was. Our first contract got an appraisal for $180, then the buyer had to walk because of financing. 2nd contract appraisal was $155, and when we sent the comps from the first appraisal and asked for reconsideration, they basically said no, so we walked away and waited for a third contract that got an appraisal for $187.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

I hope your appraiser is better than ours was. Our first contract got an appraisal for $180, then the buyer had to walk because of financing. 2nd contract appraisal was $155, and when we sent the comps from the first appraisal and asked for reconsideration, they basically said no, so we walked away and waited for a third contract that got an appraisal for $187.


This is a great example of how crazy the market is right now. We obviously got someone similar to your 2nd appraiser. We are already under contract for a new house that we are absolutely getting a steal on. We don't want to lose that deal, so we may have to eat some of the profit on our house. Had we not been under contract, I would do what you did and relist.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

They get an FHA appraisal. It is not special


Exactly. Anything else you can share? Is it normal for FHA appraisals to come in lower than conventional loans?


SDVTiger
Hawaii Fan
Cabo San Lucas
Member since Nov 2011
60826 posts

quote:

Is it normal for FHA appraisals to come in lower than conventional loans?


No. FHA just has certain requirements that conv doesnt. Nothing is special about it


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

No. FHA just has certain requirements that conv doesnt. Nothing is special about it



Thanks for this info. Can you tell me if what I was told is correct about not being able to get a 2nd appraisal?


Billy Mays
New Orleans Pelicans Fan
New York
Member since Jan 2009
24300 posts

quote:

1. He states “The current market condition for the area is that of a stable to slowing market….”
- Is this accurate? What does he mean “stable to slowing”?


I guess it depends on when your appraisal was. The has been some minor pull back when FOMO was hitting hard 3/4 weeks ago. A lot of people got excited to sell or downsize back in early May and started listing their houses at inflated prices.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

I guess it depends on when your appraisal was. The has been some minor pull back when FOMO was hitting hard 3/4 weeks ago. A lot of people got excited to sell or downsize back in early May and started listing their houses at inflated prices.


Appraisal was done last Wednesday.


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10
SDVTiger
Hawaii Fan
Cabo San Lucas
Member since Nov 2011
60826 posts

quote:

Can you tell me if what I was told is correct about not being able to get a 2nd appraisal?




The lender/investor is the only one who can request a second appraisal. Not liking a value isnt a valid reason to get another one

Usually the report has 3-6 comps. The first 3 are the ones they are using

All anyone can do is challenge the report with updated data before the appraisal was done


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50
Powerman
LSU Fan
Member since Jan 2004
151899 posts

I sold my house for 20K over what the guy appraised it for

The only appraisal that matters is that of the buyer's lender

I would relax on this note...


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

I sold my house for 20K over what the guy appraised it for

The only appraisal that matters is that of the buyer's lender

I would relax on this note...


Good for you, man that's awesome. Only issue is I'm assuming your buyer had much more to put down on the home, which I don't believe my buyer does. But we will see.


Powerman
LSU Fan
Member since Jan 2004
151899 posts

quote:

Good for you, man that's awesome. Only issue is I'm assuming your buyer had much more to put down on the home, which I don't believe my buyer does. But we will see.


That and the lender appraisal process where I sold is nothing short of rigged


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02
Weekend Warrior79
LSU Fan
Member since Aug 2014
10871 posts

Your realtor should be able to argue points #1 & 4 pretty easily. Especially, if they can provide better comps in your neighborhood within the last 1-3 months.

#3 is common to add amounts to comps to make them truly comparable. If the formula he used to add the $$$ for the fence increased the price per sqft, and the appraiser used the adjusted price per sqft in the calculation for your appraisal; he would not then add another $1,500 to the total as that is already included. If this is not how it was done, then there could be an oversight on his part.

With that said, I would also argue that value of a fence at $1,500.


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20
HighlyFavoredTiger
LSU Fan
TexLaArk
Member since Jun 2018
524 posts

Did you just get an appraisal so you’d know you were close to market value or is the property under contract and this appraisal is being done for the lender?
Reason I’m asking is that with 4 houses I’ve sold in the past, if the home was even close to being within market value the lenders appraiser came in at or above asking price every time. The lender usually wants to make the loan and they usually send an appraiser that they know will get them the needed value.


baobabtiger
LSU Fan
Member since May 2009
4392 posts

In today’s market stick to your guns and make the buyer pay the shortage out of pocket.

If they walk keep their earnest money and the next appraisal will probably come back 11k tot he good.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

Did you just get an appraisal so you’d know you were close to market value or is the property under contract and this appraisal is being done for the lender?


Under contract and this appraisal is being done for the lender, which if FHA in this case.


NS Who Dat Nation
New Orleans Saints Fan
BR
Member since Jul 2007
8737 posts

quote:

In today’s market stick to your guns and make the buyer pay the shortage out of pocket.

If they walk keep their earnest money and the next appraisal will probably come back 11k tot he good.


I believe what you're saying is 100% correct in this market. Only issue is we are currently under contract for our new home and don't want to lose it and don't want to list again but might have to.


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