so frustrated right now!

CuriousKiddosMama

We just heard back from the appraiser. We had 2 full asking price offers in 4 days, and the appraisal came in 10k. I'm just so frustrated right now. She used some comps that were 10-15 years older than our house, and didn't adjust the prices for that. She used comps from last year and adjusted the sales price by 1-2k because they were a year old. News flash woman, houses have gone up in the city by up to 25% in the past year- not 2-3%. She gave us an adjustment for the pool but not for the lot type or generator.
Ugh! I'm waiting for a call back from the realtor, but I don't even want to think about our options right now. I wish she would have pulled some more comps from our neighborhood- she only pulled 2. We have one 3 doors down that is 900 square feet less and they are asking only 27k less. It's just bigger than half our house!!!! And it's pending sale right now too.
Anybody with experience negotiating after an appraisal comes back?

CuriousKiddosMama

Looking through the appraisal more there are some errors- she didn't even get the square footage right! So we will absolutely be asking for a new one. It was a trainee appraiser so we will be questioning it for several reasons. There were several comps (1/2 from 6+ months ago).

Sisugal

You cannot compare other houses currently on the market - you have to look at houses that have SOLD - thus the houses 3 doors down does not qualify as a comp.
sq ft, construction type will over rule 10-15 years of age.

The market may have gone up 25% in your area- but did it go up 25% for YOUR type and size of house.  There is a difference.

Challenge the items you question - but first talk to your realtor about those items.

Without a change in the appraisal amount, you have to either lower the sales price, or if the buyers will agree (most won't) to split the difference.

Who determined the sales price of your home?  Was it based on recent sales?

CuriousKiddosMama

The listing agent blew us off on rerunning the comps (she met with us a month before listing) and told us to list at 136. I called to get a second opinion and her boss reran the comps and told us he would list it for 157, which is what we did. This offer was for 160 with 3k ish in closing. That rec was supposed to be based on what had sold in the past month.

maple2

When we were buying, the appraisal came in $40,000 under the agreed upon selling price.  This was quite a surprise since we and the sellers had each had unofficial appraisals done during the negotiation process that were both in line with the agreed upon price.  Our relator brought both of those unofficial appraisals as well as some other comps he pulled to the attention of the bank appraiser and requested an appraisal review.  The appraiser raised the value but it was still $25,000 under the agreed upon price.  We negotiated with the sellers about what to do. 

All this happened a week or 2 before we were supposed to move in with a 6 week old baby.  We were pretty motivated to make the sale happen, and we were buying at the bottom of our price range, so we were willing to bring extra money to the table.  I don't know whether your buyers will be willing or able to do that, but it does happen sometimes. 

You can also ask the buyers to try to get a mortgage at a different bank that might give an appraisal closer to your agreed upon price.  That won't work if they are getting an FHA loan because bank appraisals stay with a house for FHA loans for several months, but if they are not getting an FHA loan they should be able to get a new appraisal at a new bank.

CuriousKiddosMama

It's an FHA Loan. We are having our realtor take a look at it this morning and they are aupposed to be getting back with us here soon to recommend what we should do. We have pretty much decided that we are going to challenge and see what it comes back as. Our realtor is supposed to be looking for some better comps for us to use this morning since 2 were 6 months or older and 2 were just listings. So out of the comps we only feel that 1 or 2 may be valid

jtmh2012

We had the appraisal on a house we were buying come in $15k lower than the contract price. Both realtors sent the appraiser various comps that the sales price had been based on. Ended up getting the appraisal corrected.

CuriousKiddosMama

@jtmh2012‌ I'm hoping we can get it corrected- but she also sent over a price amendment sheet so I don't think the buyer is going to be to happy that we are going to challenge the appraisal. Think she was happy it came in less and now thinks we have no options. We will see what happens. I'm still hoping for the best.

brij2006

The thing is, if the property appraised for less than the purchase price on an FHA loan, then they would likely be declined for the loan on that home.  Since an FHA loan usually mean little to 0% down on the house.  So the buyer should actually be happy that the appraisal is being challenged and they should be challenging it too.  Otherwise they would not receive the loan for anything higher than the appraised value.

short+sassy

Having the square footage wrong is a HUGE mistake. An appraisal is literally set by multiplying the square footage of the house by what the comparable square footage value is.  I don't know if that particular error is a big or small amount of the difference, but it should be a pretty easy no-brainer to fix.  The appraiser should amend at least that part, for no extra cost, since it was their mistake.

maple2

brij2006 said:

The thing is, if the property appraised for less than the purchase price on an FHA loan, then they would likely be declined for the loan on that home.  Since an FHA loan usually mean little to 0% down on the house.  So the buyer should actually be happy that the appraisal is being challenged and they should be challenging it too.  Otherwise they would not receive the loan for anything higher than the appraised value.

Not necessarily.  The buyers could be thinking that the purchase price will have to be lowered to the appraised value which would be good for them.  The FHA appraisal will stay with the house for some period of time, so vikingsfan is in the position of having to lower the price so that the current buyer (or any other FHA buyer) can get approved for her mortgage or be willing to walk away from the deal and hope that a non-FHA person will want to buy the house and go with a different bank that gives a higher appraisal.  Or that an FHA person has the extra $10,000 up front, but that seems less likely if they are going with FHA.

CuriousKiddosMama

Yes, they were both FHA financing, so either way we would have been I. This situation I guess. Although the other lender may have sent out a better appraiser who could have at least measured the house correctly!
Heard back from our realtor. She looked at it and said the mistakes they made weren't major enough to call for a reevaluation and that we would have to pay for a reappraisal. She said that is a gamble even though we think it should go up, it could for some reason go down. She said part of the problem is that we are one of the bigger houses in the neighborhood, and most of the sales (that we based the price on) are smaller one stories in the neighborhood. The appraiser didn't consider those comps at all. So she had to go outside the neighborhood and use old comps to get ones that worked.
I think we hopefully came up with a solution. We are no longer paying any of their closing costs, and then we will meet them in the middle. Our realtor is giving us back 1% to help make up the difference. They would have to bring 3k to closing. Now we just have to see if they will accept that. Otherwise we may walk and try for a conventional buyer. The house is paid for so we wouldn't have much in the way of carrying costs if we do end up moving into our other house before this one sells.
I'm feeling a lot better about this after talking to the realtor and hopefully finding a middle ground. 10k off on the appraisal was such a shocker, I figured it may come back a couple off either low or high, but not that much!

Xstatic3333

It is bonkers that incorrect measurement isn't enough for a reappraisal! I hope the seller will accept the compromise-let us know how it goes! $3,000 for CC really isn't bad. I'm also glad your realtor is kicking in some. It seems to me like she could have helped avoid this back when you listed.

Sisugal

Usually the sq footage comes from city property records.

CuriousKiddosMama

This has turned into a nightmare. The square footage was measured by the appraiser using her electronic measure thing @sisugal.
We heard back from the buyer- she has NO cash to bring to the table besides her 3.5% that FHA requires to have down. She came back at us with 150k plus 500 in repairs. We are now trying to get her to either give up the repairs or move closing a week so we don't have to move twice. (Into a storage unit/in with my sister and then into our new house).
Apparently this crappy appraisal has completely screwed us over- we have to disclose it to a Conventional buyer which means that even if we did get a conventional buy, I"m sure they would retract any offer above 150 when they find out.
I'm feeling pretty depressed about it right now because it doesn't seem like we have an option. We don't know what comps the head realtor used when he told us to list it at 157 because he didn't put it in the folder, and when our normal realtor looked for some better ones, she said there just isn't really a great reason to pay for a new appraisal- we may not get much more than we have to pay for the appraisal back. I'm kind of wishing we had gone with another realtor as some of you suggested at the beginning because it just seems like a lot of people dropped the ball during this whole thing.

Thanks for letting me vent here. Sorry this got so long- I need to go have a drink!

Xstatic3333

Yikes. I am so, so sorry. I bet she'll at least budge on the closing date.

In the meantime, bottoms up!

Wulfgar

Good luck buying and selling homes suck from my experience.

vlagrl29

I'm sorry that this really sucks.  We've never had to sell a house before so I can't even imagine what you are going thru.  Enjoy your drink tonight

CuriousKiddosMama

Well we aren't too happy with the deal, but we did get them to move closing so at least that is a good thing.
They were ready to walk away if we didn't give them the 500 in repairs, so we did because putting it back on the market and having to deal with this all again over $500 is stupid. And in all likelihood we would just get another FHA buyer so it wouldn't change anything. Our agent is giving us 1% of their commision so that makes up of some of the loss but we are clearing a lot less from the house than we thought we would which sucks completely.
Again, thanks everyone! Really needed to vent yesterday. Today I'm trying to focus on moving into our new house, I will be taking ds to a Gymboree open house and maybe doing some window shopping!

maple2

Honestly, after going through the home buying process the first time, I wondered why there was even a price negotiation at all before the appraisal since that can totally upend any agreements that come before it.  Sorry the appraisal process did not work out well for you.  I know how frustrating it can be!

Kitten80

Ok, I'm de-lurking @vikingsfan711‌ - could you call the head realtor again since it is based off the numbers he gave you? I don't understand how the fact she is a trainee that didn't even get the square footage right doesn't qualify for a challenge. *hugs*. Good luck with the move.

amyl2585

We had a realtor list our house for $209 k. We ended up switching realtors because she was terrible, and when we re-listed the new realtor didn't think the house would appraise at more than 180k. The second sold our investment property in 2 months, while it sat for 6months with the other. I really just think some realtors have no clue what they are doing.