Can Someone in the Real Estate Business Offer Help?

posted 3 years ago in Home
Post # 3
Member
1721 posts
Bumble bee
  • Wedding: August 2010

I am not in the real estate business, but I would have your agent tell the sellers if they pay for the appraisal by an appraiser of your choosing, and it appraises at 235k or higher that you will take it (barring inspections etc.).  I would only do this if they pay for it though because appraisals are very expensive.

Post # 5
Member
13019 posts
Honey Beekeeper
  • Wedding: June 2011

That sounds really odd.  Normally a bank wont even loan more than what it’s worth so it’d be hard to sell that much higher than the apprasial.  Can you find a mortgage broker to work with that would cover the apprasial cost?  I’ve bought a house and refianced twice, all of which required an apprasial and have never paid for it.  The mortgage broker has covered all required fees, including apprasial, title, whatever else.

Post # 7
Member
1721 posts
Bumble bee
  • Wedding: August 2010

@Irishb:  Honestly, I know it’s your dream house… but I think I’d move along.  These people are seeming way too shady.  What else are they going to hide? Just imagine how much hardball they are going to play after inspections, ugh I wouldn’t want to deal with it.  I hope you can find a different dream home!

Post # 8
Member
10495 posts
Sugar Beekeeper
  • Wedding: January 2011

@Irishb:  I’m not an expert at all, but how was the appraisal done?  By someone actually looking at the house, or with an automatic system similar to CHMC’s Emili?

Post # 9
Member
611 posts
Busy bee
  • Wedding: March 1988

@Schatzie821:  I completely agree. 

There are just so many red flags in everything the OP has posted about this transaction. Even it is your dream house, you need to think about resale value. 

We ended a contract on our dream house because the inspection was horrible. The house looked perfect but the inspector found so many flagrant code violations. I asked him if he would buy the house if he were in our place… he said he wouldn’t even live in it if it was given to him free. I cried for two days! 

There will be another dream home and everything will just fall into place.

 

Good luck!

Post # 12
Member
10495 posts
Sugar Beekeeper
  • Wedding: January 2011

@Irishb:  That sucks, although we paid $150 or something stupid for our lender to use their own automated system, instead of double that for a real appraisal.  Undecided

Are you able to see their full report?

Also, did you have a feel for what the house was worth?  Things were selling as we were looking, so we got a good feel as to what was overpriced.

Post # 13
Member
2895 posts
Sugar bee
  • Wedding: May 2014

Appraisals are all about the comparables, aka houses that have sold in the same area in the most recent time period that are similar in size and age to your home.  Best practice is houses that are of the same type (aka, single family un attached two story is not comparable to a town house, or a ranch, or a split level) that has sold in the last six months, and is within a mile of your home.  Other aspects of the home (2 car garage, exterior shed, swimming pool) that other homes may or may not have are given a value by the appraiser.  

The biggest problem that this is raising lately is that short sales and fore closures are thrown into this lot.  

If you really want this home, hop onto Zillow and check for other homes that have sold near by. Also, do not forget that EVERY seller has an over inflated view of what their home is worth, and your agent only gets paid when you byup a home.  Do your own research, and yes, that does mean you may have to walk away.

and contrary to another posters advice, never ever ever trust some who the seller pays for an inspection, ever,no mater what.  Most banks will not take this appraisal anyways, as they have a network of chosen, trusted, appraisers.  The bank has so much skin in doing this right consinstantly, you can trust their people in this.

Post # 14
Member
1604 posts
Bumble bee
  • Wedding: September 2013

I work for an appraisal and title management company, so I deal with this kind of thing every day (we are the middleman between the lender/bank and the buyers/sellers).

First of all, I’m sorry this happened to you. We do see things like this happen every so often, and it sucks, especially for the buyers, but the reason behind appraisals is this: before the mortgage bubble burst in 2008/2009, mortgage brokers were doing really dirty business – for example, selling a house that’s only worth $100,000 for $500,000 so they could make more of a commission. They’d “pay off” the appraiser to have them appraise the house at a certain price, even if it wasn’t worth that price. Then the seller’s would have this huge mortgage, the market would decline, and they’d be stuck paying a gigantic mortgage only to find out their house is NOT worth that much. Then they’d either default on their mortgage or end up selling it for less than half what it was worth.

So this whole annoying process is to protect you AND the lender.

Anyway, if you are really set on this house, I would probably get another appraisal. BUT here are a few things to remember:

1) appraisers have to abide by USPAP (Uniform Standards of Professional Appraisal Practice). Basically this means that they have to remain a neutral party when it comes to appraising a home. They can’t let anyone influence their final product. And they have a giant set of rules and regulations they have to follow when they put an appraisal together. It’s not just an “opinion of value.” That “opinion” is based on SO many concrete things – improvements, neighborhood, the market, square footage, room count, etc, etc, etc, etc. This is why an appraisal is at least 10 pages long. There really is a lot of data that goes into determining a home’s value. So it’s VERY rare that an appraiser botches an appraisal.

2) If you get a new appraisal by a new appraiser, it COULD come in higher – but not necissiarly as high as you “need” it to be to get the loan. Remember, an appraiser’s job is to determine what the house is worth – not what it’s selling for.

3) If you do request a new appraisal (or if you have the first appraiser revise their report), you have to have clear and specific data to prove your point that you (and/or your realtor, the banker, etc) believe he house is worth more. You might suggest comparables (or comps), which are other homes in the area which sold recently (usually within the last 6 months and are about a mile from “your” home). But keep in mind that just because a house looks similar to you, doesn’t mean it is. Again, there are TONS of factors that go into determining a homes’ value, and just because the house next door sold for $200,00 more than yours doesn’t make it a comp.
Again, if there’s any CONCRETE data that you, your realtor, and/or the lender can come up with, go back to the AMC (appraisal management company) and file an addendum or an appeal.

But it just can’t say “we disagree and think the house is worth more.” You have to be specific in regards to the features of the home, the market, the neighborhood, etc.

So maybe try one more time – but remember, even if the new appraisal is higher, it still might not be high enough for you to get the loan. If this is the case, I’d leave it alone. If the home is listed for that much and TWO appraisers have much lower appraisals, they are actually saving you tons of money and the nightmare that comes with paying too much for a house.

Good luck! And feel free to PM me if you have any questions – this industry is CRAZY complicated and nothing is ever black and white.

It’s especially hard for a buyer to understand because, after all, this is your home we’re talking about! 

 

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