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Regular Contributor
Chbraswell
Posts: 191
Registered: ‎07-02-2012
0

appraisal question

So the house I am trying to buy was appraised for exactly 69,900, which is also the selling price.  I just knew that amount would be higher due to area but as long as it's at or above then i'm fine. However, a few months back they were going to sell the house for 79,900.  I find it odd that the appraisal amount is the same as the sale price.  Do appraisers lower the amounts or is it a coincidince? My boss who just bought a house said her appraisal was just a few thousands higher than the asking prices but had a higher price tag a few months ago.  Is this normal?

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Regular Contributor
Laura1369
Posts: 151
Registered: ‎05-12-2014
0

Re: appraisal question

They could have lowered the asking price because it appraised low the first time they were trying to sell it! 

Valued Contributor
Jazzzy
Posts: 2,679
Registered: ‎07-29-2009
0

Re: appraisal question

It's not a coincidence. The appraiser has the purchase agreement and knows the selling price. It is part of their regulations and guidelines that they have that information.

Valued Contributor
ezdriver
Posts: 1,918
Registered: ‎08-24-2013
0

Re: appraisal question

Because the lower of the purchase price or appraised value is used by lenders, the appraiser has zero incentive to deliver a value above the purchase price. Remember that the objective of the appraisal is to confirm for the lender that the collateral value is at least as much as what is being used to make an underwriting decision ... not to placate the buyer.



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ways2go
Posts: 246
Registered: ‎02-06-2014
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Re: appraisal question

I am closing on a house friday. They were asking 165k.  The sellers were just flipping the house, and refurbished the house.  Their asking price was on the high end of comparable houses in the neighborhood.  I was going to pay the asking price after they did a few things to the house still.  The VA appraisal came in at 147k.  The deal fell through. It is a nice house.  I ended up offering to pay the closing cost, and gave up on them doing anything else to the house. They agreed to that, they were stuck with a VA appraisal for 147k for about 6 months, I believe that's what they said. They wouldn't be able to sell it to anyone with a VA for more then 147k.  Actually, comparable houses at 147k in the area,  need alot of work that I didn't want to do.  So in the end the Appraisal can be a deal breaker,  and the appraiser is looking out for the lender and the borrower IMHO.

Valued Contributor
Jazzzy
Posts: 2,679
Registered: ‎07-29-2009
0

Re: appraisal question


ways2go wrote:

I am closing on a house friday. They were asking 165k.  The sellers were just flipping the house, and refurbished the house.  Their asking price was on the high end of comparable houses in the neighborhood.  I was going to pay the asking price after they did a few things to the house still.  The VA appraisal came in at 147k.  The deal fell through. It is a nice house.  I ended up offering to pay the closing cost, and gave up on them doing anything else to the house. They agreed to that, they were stuck with a VA appraisal for 147k for about 6 months, I believe that's what they said. They wouldn't be able to sell it to anyone with a VA for more then 147k.  Actually, comparable houses at 147k in the area,  need alot of work that I didn't want to do.  So in the end the Appraisal can be a deal breaker,  and the appraiser is looking out for the lender and the borrower IMHO.


You are so right! In the end, appraisers are responsible for saving many buyers from getting into overpriced properties and saving many banks from lending on them. Appraisers don't come in under value without a lot of work, documentation, and thought. They don't do it lightly. It's disappointing at the time but could prevent disaster on down the line.


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