Appraisal

laurenclaire1386 · July 2014

We're at the point in the home buying process where the only thing hanging over our heads is loan underwriting. I'm confident the underwriter shouldn't find anything she doesn't like in our financial history/bank statements, etc. What I'm worried about is the appraisal. We're doing FHA. If the appraisal were to come in significantly lower than our loan amount, we don't have the cash on hand to make up the difference, so we'd have to walk away. Although, I guess we could hire another appraiser and hope for the best. I wanted to see if anybody here has any experience with the whys, hows, and what to do afters when a low appraisal happens. TIA!

CItyLimit · July 2014

Is there a reason you think its going to come in under? If the houses in the area are selling for about the same price then you shouldnt have an issue. If they arent then it might be better for you to walk away now because re-appraisals can be a long and expensive nightmare as far as FHA goes. FHA does have a tendency to lowball things, I wont deny that, but they always seem to come in above the offer (just) as long as the market supports it. I have bought two houses on an FHA, the first one the house was worth almost double what I paid, the estimate was based on the value after I replaced the roof and drywall. FHA came in just above my offer price (1k more) even though the smaller houses on the same street were selling for a good 60k more than mine because they had good roofs. I was a little offended but didnt care at the end because I got the house.

My new house which I close in a few days, also came in about 1-2k above my offer price. This house hasnt been updated since the 60s and so its quite a bit cheaper than its counterparts in the neighborhood (about 40-50k cheaper). Still FHA which doesnt count updates in their estimates once again said it was barely worth what I was paying. Like I said they lowball for whatever reason but if the houses in the neighborhood are selling for around what you offered then you shouldnt have an issue.

laurenclaire1386 · July 2014

Thanks for sharing your experience! I have no good reason to think the appraisal will be low, I'm just a person who worries unnecessarily about things beyond my control. So this is mostly me being paranoid. I'm glad to hear you've had good experiences with FHA appraisals. Looking at the comps for our neighborhood, the most recent sale was like 20k more than what our asking price was, so I think we should be ok.

Bubblegum5586 · July 2014

I posted last month about our appraisal coming back $15K UNDER what we we offered! After the seller challenged the appraisal (which stayed the same) he finally accepted our new lower offer (the appraised price). He was obviously reluctant to do that, so we offered with no closing costs back so it only dropped the price $12K then. It was stressful coming up with the extra $3K but it was so worth it, and so exciting we got the house for so much less.

I think he realized that if he said no to our new offer, all the time it would take to re-list and try to find a new buyer. And if that buyer was financing the house they would have the same problem again.

Good luck and fingers crossed for you!

laurenclaire1386 · July 2014

Thanks! The appraiser came out to the house on Saturday, so I should know soon how it turned out.

Appraisal

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