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Low appraisals have been a problem for a couple of years around here, Jeff. Though the problem appears to be diminishing at present.
When I have one, I will try to pick apart the appraisal so I can legitimately contest it and then offer my input. Though occasionally the seller and/or the buyer aren't willing to wait and there's either an adjustment to the price or the deal falls apart.
we've been fortunate so far... we haven't lost any deals because of an appraisal.... we had to renegotiate a couple of the deals, but everyone was motivated....not a problem.
I occasionally have to deal with low appraisals on the financing side. I always hope buyer & seller can negotiate, but there are things we can do on the financing side to make it easier (especially if a buyer was planning on putting more than 5% down). All short appraisals I've had over the past year, I've fortunately been able to work out.
I haven't had any appraisal issues recently, though they do come up every now and again.
For the most part, we've negotiated and come to an agreement. In one situation, the appraisal was so outrageously incorrect, the lender threw it out and ordered another. Another time, we asked for reconsideration and got it.
When I discuss with buyer clients how they can make their offer stronger, we discuss removing the appraisal contingency and covering the defict, should there be one.
When I have a very popular listing, the seller may ask that financed buyers remove the appraisal contingency.
had one recently where the appraiser (from riverside county) used rents from a rent survey that were well below the rent we were actully collecting on a legal duplex. this came to light only when i demanded to see his working papers and reconciliation. he was offended that i would question him and when i explained that the collected rent from the last 14 months WAS the definition of market rent he hung up on me. the buyer ended up having to pay for a second appraisal and move lenders. the second appraiser was told beforehand what had happened on the prior file and he laughed out loud. i am all for independent valuations but to fail to use actual rents when they are established and provable is arrogant.
the HVCC is a laudable idea but the roll out has been less than seamless. we are learning lately that lenders that have contacts with appraisers are the ones to use. i'm not sure how they get past the firewall but i had a lender tell me minutes ago that his apprasiers know that their work will be reviewed and that problem appraisers get pushed off the boat.
i have renegotiated deals whn the appraisal was legit and the comps were good ones, but never without a good hard look at the appraisal.
I had one and it knocked my buyer out. I argued the appraisal and [resented comps that were missed and the appraiser would not budge. The bank agreed with me, but could do nothing. But they won't be using them again
It happened to me once last year Jeff. I had the buyer. The seller lowered the price to met the appraisal and we closed ok. It was a bad scene for awhile but in the end everyone seemed happy.
It almost seems like a repeat of 10 years ago! I hope not...
I have only had one appraisal in 8 years come back low. It's has not been a problem for me. That one home owner blames me for the low appraisal and won't even talk to me anymore. Go figure...
I have not had any appraisal issues recently.
The appraisals in our area are coming in on target. Last year I had one come in low. My seller took it and we closed.
Appraisals are always a concern that must be prepared for.
if you are REALLY getting the best price for the seller, this SHOULD be a concern.
The first line of defense is a justified negotiated price.
Second is vetting the buyer. This gets the buyer's agents shorts in a wad but is essential to proceeding. Can the buyer make up the deficit of a low appraisal.
Yes - continue.
No - reject the offer.
Finally, appraisers are lazy. Make their job easier.
Now have you actually asked an appraiser to show you the banks order? Do you know each bank's requirements are different? How can you properly prep if you don't know what's in the recipe?
No appraisal contingency offers come in when the buyer sees lots of excited folks looking and huddling up with their REALTOR in whispers talking about 'their' house.
REPEAT...vet the buyer if appraisal is a perceived problem. Eliminate the bank from the negations.
Haven't had any problems yet. None of the latter.
I have had a low appraisal this year. I had prepared my seller for it early on, and he grudgingly came down tot he appraisal price. Luckily, it was only off by a small amount.