topic Re: Appraisal came in too low in Mortgage Loans

UPDATED 5/30: Appraisal came in too low

Mrsg714 — Mon, 30 May 2016 13:58:31 GMT

The appraiser finally sent in the appraisal and it's just my luck that there are issues!

There were some minor issues of things that could repaired in a day, but the big issue is that the appraisal is $10k too low. We aren't able to come in with the difference so that scenario is out of the question. I am so upset because we have worked so hard and it seems like it's all going to fall apart at the last minute. I am credit approved, but now this. I have been trying to buy a house FOREVER and it seems like it's not happening.

I'm just venting.

Update: I offered to lower the seller assist by almost $2000, but the seller wants us to split the difference in appraisal amount. I'd be looking at bringing in another ~$4500. I like the house, but I don't feel comfortable with that. I am trying to be understanding of the sellers position and the fact that he may have already lost all that he's willing to lose on the house. I have to do what feels right for me and my family though. I'm going to counter and see what happens, but I'm not holding my breath. The main thing that angers me is that we get to do all this over again: home inspections, appraisal, waiting...you know the drill. I'm over the whole home buying thing.

UPDATE 5/30: Just realized I never updated this thread. We closed and moved in on 5/10!! It was stressful, but everything worked out. We love our home.

Re: Appraisal came in too low

GirlMelanie89 — Mon, 18 Apr 2016 17:46:09 GMT

Don't be discouraged...Is the seller not willing to lwoer the asking price by $10K? It would be smart to do so on their part, as the appraisal price is attached to the home for a certain amount of time for FHA loans, so even the new buyer would have to either ask for the lower price or make up the difference...but $10K is a lot.

Re: Appraisal came in too low

StartingOver10 — Mon, 18 Apr 2016 17:55:50 GMT

@Mrsg714 wrote:
The appraiser finally sent in the appraisal and it's just my luck that there are issues!

There were some minor issues of things that could repaired in a day, but the big issue is that the appraisal is $10k too low. We aren't able to come in with the difference so that scenario is out of the question. I am so upset because we have worked so hard and it seems like it's all going to fall apart at the last minute. I am credit approved, but now this. I have been trying to buy a house FOREVER and it seems like it's not happening.

I'm just venting.

You should be able to work it out. Most of the time it is worked out. These are the possibilities:

Seller drops the contract price to the appraised value (this is the most common solution)
Or Buyer brings in the difference on top of normal dp and closing costs - this is not an option for you according to your post above
Or Some compromise is worked out between those two options
Or The contract is cancelled if none of the above works.

It is true that the value from the appraisal stays with the property for 4 months on FHA appraisals if the deal falls apart which means future buyers have to be getting a conventional (or VA or USDA) type mortgage. This limits the buyer pool so the seller should take a good hard look at reducing the contract price to the appraised value.

Re: Appraisal came in too low

Mrsg714 — Mon, 18 Apr 2016 17:57:35 GMT

Yes, $10k is a lot so I'm not sure how it'll play out. I actually haven't heard from my agent yet so I don't really have much info. I'll be sure to update this post.

Re: Appraisal came in too low

Mrsg714 — Mon, 18 Apr 2016 18:01:27 GMT

Thanks for breaking down the options for me! I'm frustrated, but I'm just going to see how this plays out. If it doesn't work out then its just not meant to be. I like the house, but I'm not emotionally attached to it.

Re: Appraisal came in too low

Anonymous — Mon, 18 Apr 2016 18:16:16 GMT

Sorry to hear that. I just had the same thing happen to me on a Va loan, came in 17k low. I appealed the value but in the meantime I found a better house in a better neighborhood. I canceled contract and put offer in on other house. What sucks is all the money for inspection and appraiser is gone. Something funny though, I had to pay the appraiser so I did a Google search and showed up at his house to pay him. Freaked him out, he told me his address isn't listed anywhere some county employee blah blah. I just wanted to pay and get a receipt. But his face was priceless.

Re: Appraisal came in too low

Mrsg714 — Mon, 18 Apr 2016 18:33:46 GMT

I'm glad you found another house, Unclebuck034! I guess it just wasn't meant to be. That's so funny about you personally going to pay he appraiser. LOL!

Re: Appraisal came in too low

Sassy_Taurus — Mon, 18 Apr 2016 19:02:20 GMT

Same thing happened to me. The appraisal came in 5k under. At first the seller did not want to lower so I canceled. A week later I was notified that the seller now wanted to negotiate. He lowered but took away the money he was giving me for closing. I really liked the house so I accepted and will just pay the closing. My realtor is contributing now so I just had to come up with the other half. I hope things work out.

Re: Appraisal came in too low

Anonymous — Mon, 18 Apr 2016 23:12:21 GMT

I had it happen on my first home, appraisal came in 10k less, we had no money never mind an extra 10k, seller wouldn't budge. As a last ditch effort, I used another appraiser and it came in right at purchase price, so that may be another option. Back when I did that, I think the LO ate the appraisal fee to get it done. Another thing to note, if you have 2 appraisals and they are both 10k lower, give or take, it is a good negotiating tool to bring to the seller to convince them to drop the price.

Re: Appraisal came in too low

Mrsg714 — Mon, 18 Apr 2016 23:25:39 GMT

Thanks for sharing your stories, Sassy and Obxlover. I'm waiting to hear back from the seller via my agent, but probably won't hear anything until tomorrow. I can't really afford to lose the entire 4% seller assist. We'll see what happens.

Re: Appraisal came in too low

Anonymous — Tue, 19 Apr 2016 00:59:38 GMT

@Sassy_Taurus wrote:
Same thing happened to me. The appraisal came in 5k under. At first the seller did not want to lower so I canceled. A week later I was notified that the seller now wanted to negotiate. He lowered but took away the money he was giving me for closing. I really liked the house so I accepted and will just pay the closing. My realtor is contributing now so I just had to come up with the other half. I hope things work out.

your Realtor is contributing towards your closing costs? that's awesome!

Re: Appraisal came in too low

Anonymous — Tue, 19 Apr 2016 01:07:54 GMT

Sometimes, Realtors will give a little from their commission to get deal done.

Re: Appraisal came in too low

Sassy_Taurus — Tue, 19 Apr 2016 02:35:40 GMT

@AhMedInMD to get the deal done yes.

Re: Appraisal came in too low

_NERD — Tue, 19 Apr 2016 02:43:51 GMT

Sorry to hear your story. I'm kinda hoping the b house we're buying appraises lower so we can buy it cheaper. Hehehe.

Re: Appraisal came in too low

Anonymous — Tue, 19 Apr 2016 17:50:25 GMT

This string has me very nervous! Our appraisal happened last Thursday, and the appraiser said we should have the report by the end of this week. So I'm waiting on pins and needles. Should be ok, as just based on appreciation alone this house is above the purchase price from what I can see. But its never over til its over!

I wonder to what extent an appraiser takes into account the athestics of a place? I.e. the style of a house . Or is it simply square footgage/lot size/neighborhood?

Re: Appraisal came in too low

Mrsg714 — Tue, 19 Apr 2016 17:54:17 GMT

_Nerd I wouldn't wish this on anyone! Although getting your house cheaper would be awesome!

Re: Appraisal came in too low

Mrsg714 — Tue, 19 Apr 2016 17:55:55 GMT

Eileen, This whole process is scary. I hope your appraisal comes back fine and you don't get held up in anyway.

I haven't heard anything yet so I'm pretty frustrated. I'm just in a holding pattern right now.

Re: Appraisal came in too low

Anonymous — Tue, 19 Apr 2016 18:00:28 GMT

Mrsg- good luck to you too! I hope things work out. This whole process started for us back in early Feb., and this appraisal is the very last piece that needs to fall into place. All along I've felt like "ok, NOW is when its going to fall apart." Its just plain nerve-wracking.

I've begun to wonder if there isn't a business opportunity in first time home-buyer coaching. Not kidding!

Re: Appraisal came in too low

Mrsg714 — Tue, 19 Apr 2016 18:04:42 GMT

Eileen- We started this process beginning of March. We were actually all set except for the appraisal. We could have had an early closing THIS Friday. Wherever we wind up we'd better like it 'cause I'm not going thru this again.

Good luck to you as well! I think you might be onto something with the business idea.

Re: Appraisal came in too low

StartingOver10 — Tue, 19 Apr 2016 22:35:28 GMT

@Anonymous wrote:
Mrsg- good luck to you too! I hope things work out. This whole process started for us back in early Feb., and this appraisal is the very last piece that needs to fall into place. All along I've felt like "ok, NOW is when its going to fall apart." Its just plain nerve-wracking.

I've begun to wonder if there isn't a business opportunity in first time home-buyer coaching. Not kidding!

Realtors walk their clients through first time home buying type purchases....sounds like your Realtor didn't do that