How accurate is a home appraisal for the mortgage company?

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.

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

(no message)

quote:

---

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?

---

First house I bought in 2009 appraised for $205k. We bought for $179k.

The appraisal isn’t really part of setting the price. It happens after the sales contract has been signed and the mortgage company is determining if it’s a house worth the cost of the loan.

I guess my real question is - do appraisals determine fair market value? If not, what are they determining?

You bought a house that appraised for what you bought it for, but you think it should have been higher? I wouldn't complain, you will be paying less in property tax, that you believe you should.

quote:

---

My home appraised for $235k, which conveniently was the exact price for the sale

---

Agent...

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.

I’ve sold 5 houses over the last 20 years, my experience has been pretty much what TigerDebaiter mentioned. The appraiser has always been selected and sent by the loan company that was providing the buyers loan, the loan company wants the business and has already agreed to make the buyer a loan, so they select appraisers that they are familiar with and know will being them back whatever appraisal the contract needs.
The appraiser wants to keep getting called often by the loan company so they make their appraisal match what the lender wants. One house I sold, the appraiser never pulled out any type measuring device, only spent about 6 mins inside and outside the house, sent the lender an appraisal $2000 above my contract price.
Last home I sold, I was asking about $15,000 more than I thought I could get, the appraiser did about a 20 min look around, sent lender an appraisal $11,000 more than I was asking, at closing I saw that the young buyers had qualified for some kind of special loan program and were getting $10,000 above contract for their loan amount, then I understood why there was an $11,000 unexpectedly high appraisal. So to sum it up, they can make it whatever they want to and can come up with comps to make it work.

The appraisal Above the sale price isn’t an issue. The issue is when it appraises for less than the selling price. And now the bank has to worry about issuing a mortgage for a higher value than it could be worth