Appraisals higher than purchase price?

[StartingOver10]

You can not estimate where the appraiser will come in. I had a closing a couple of months ago where every single one of the sold comps was in the $270k to $295k range. The contract price was $275k and the appraiser made a massive miscellaneous adjustment to each of the sold comps reducing the final appraised value to $255k. 

You can have perfect comps - and the appraiser could still come in low - or high. It's great that your lender uses the appraised value and not the contract price.  I hope your appraisal comes in high. But don't be surprised if the valuation is not what you think it will be.

[Anonymous]

Thanks, that's good to know.  The appraisal thing is making me crazy.  In the situation yuoi described can you request a 2nd appraisal??? It all seems so arbitrary.  

[StartingOver10]

---

@Anonymous wrote:

Thanks, that's good to know.  The appraisal thing is making me crazy.  In the situation yuoi described can you request a 2nd appraisal??? It all seems so arbitrary.  

---

You can if it is a conventional loan - not FHA.  FHA appraised values stay with the property for 6 months.

I see it all the time - especially with high LTV loans.

Don't let the appraisal drive you crazy - work with what you have when it comes back. If it's high or at value - great. If it comes in low, you will need to speak to your LO. Is this a refi or a purchase?

[Anonymous]

We got awesome news today...appraisal came back 10K over purchase price.  This decreases our closing cost by 8K!!!

The appraiser probably could have valued it higher based on the comps he used (adjusted comps were $317K, $318K, 302K, $322K, $311K) but I think the abandoned home next door may have played a factor. 

We are also still within a year of our relocation date so hubby's job will reimburse closing cost & inspections and we'll get $2K back from that.  Now we're waiting on title and underwriting...

[Anonymous]

My appraisal came back $8,000 more than the purchase price.    

[Anonymous]

---

@Anonymous wrote:

We got awesome news today...appraisal came back 10K over purchase price.  This decreases our closing cost by 8K!!!

The appraiser probably could have valued it higher based on the comps he used (adjusted comps were $317K, $318K, 302K, $322K, $311K) but I think the abandoned home next door may have played a factor. 

We are also still within a year of our relocation date so hubby's job will reimburse closing cost & inspections and we'll get $2K back from that.  Now we're waiting on title and underwriting...

---

How does a higher appraisal over the purchase price decreases the closing cost?  Is this standard for all mortgage loans? 

[Anonymous]

"How does a higher appraisal over the purchase price decreases the closing cost?"

Yes please elaborate.
I just received my appraisal the other day...came back 2k above purchase price.

[CS800]

For what I've seen, appraisers can do a lot of magic with their comps. Most appraisals are made to suit the banks wherever possible and within reasons.

It could be any comps within reason but what makes an appraiser choose one over the other is a great mystery. You will have more chance figuring out why aliens don't talk to us than trying to decipher an appraiser's logic.

[Anonymous]

We are using a small savings and loan bank. They are doing a portfolio loan (the will keep the mortgage instead of selling it) so they can set some of their own guidelines. They calculate LTV based on the appraisal amount. Most banks do not calculate it that way.

[Anonymous]

And that should say down payment not closing cost