Posted by Bud Branstetter on July 17, 1999 at 20:44:22:
You can also have the buyer transfer the file to a new lender to avoid any taint of being turned down. I believe it is best to give the appraiser all the information about features and improvements upfront so he can compare with his other properties. I have had an appraiser tell me he didn’t want to use a comp because it was the highest value sold.
What if the appraisal comes out lower than sales price? - Posted by park
Posted by park on July 16, 1999 at 18:52:23:
I have two property under contract for around $120,000 each. I’ve bought them for $100,000 each 2-3 years ago. I think it will come out alright, but I was a little concerned because there weren’t too many sales in the area, and several sales that were made within past one year were the properties wihich were in bad shapes. They were sold around $95,000 to $100,000. Do you think this will effect on the appraisal of my properties?
What can I do if the appraisal come out low? The buyer is getting %90LTV investor loan and putting 10% down.
What I have done in this situation is… - Posted by Lee
Posted by Lee on July 17, 1999 at 19:23:22:
Have an appraiser meet you at the property and hand a copy of the offer to purchace (contract) to him/ her along with your recent sales comps which justify your contract sales price, the appraiser SHOULD be able to come up with their own evidence of value for your sales price.
But, here’s the kicker…
If the buyer has been to one mort.co. and then goes to another mtg. co. the second lender will know that buyer has already been to a mtg. co. (via credit check) and applied for a mort. over 75,000, and may be turned down.
Good Luck!
Lee
Re: What if the appraisal comes out lower than sales price? - Posted by Dave T
Posted by Dave T on July 17, 1999 at 12:25:01:
The “problem” is not yours, it is the buyer’s. Your contract with your buyer specifies the price that is to be paid. The buyer’s lender will loan 90% of the appraised value or the purchase price whichever is less. Your buyer and his lender now control whether a settlement occurs.
There are several alternatives in the event that the appraisal is lower than the contract price. The buyer could make up the difference out of pocket. If the buyer is unwilling to do this, then the buyer could invoke a financing contingency to cancel the contract. If the buyer still wants to pursue the deal, then the buyer can request a review of the appraisal and an amendment if the appraiser overlooked some material fact that affected the appraised value.
Sometimes lenders don’t want to make some loans and will request a “conservative” appraisal to provide a face-saving basis for denying the loan. If your buyer suspects this is happening, he can take his business to another lender. In this event, you will probably need to extend the settlement date to accomodate your buyer.
Re: What if the appraisal comes out lower than sales price? - Posted by JM
Posted by JM on July 16, 1999 at 19:13:27:
Are your houses in better shape than the other houses that sold that were in bad shape? Assuming that they are then you don’t have anything to worry about. Each year the houses will appreciate a little too. Now make sure when comparing the sale prices that you’re comparing your apples to someone else’s apples and not their pears. That way you have a legitimate comparison.
Hope that eases your worries, Good luck!
JM