We got the 3rd appraisal back on The Red Garage House, and it came in well-below the purchase price…
While this was disappointing, it gave us the impetice we needed to just kill this deal once and for all. After nearly three months of underwriting hell, dealing with idiot mortgage brokers and a buyer who wasn’t completely honest with us, it was time that we either closed this deal or cut it loose. The low appraisal helped make the decision, and the deal is now officially in-the-past.
We will likely be reducing the price on this one in the next day or two (we still have a great profit margin), and will start marketing it seriously.
The Hat Trick House is in the same sub-division, so we’ll build a joint marketing effort around both houses and hopefully be able to attract a lot of traffic in the coming weeks.
Now that the deal has been pulled from the buyer I wouldn’t be surprised if he comes back with another offer. Keep up the good work though and I bet you have it sold again in no time.
We actually just had one go through, original appraisal was $200,000. The review appraisal came back at $180,000. The original appraiser put together a “challenge document” of the existing appraisal (which was just a very simple letter, saying the comps that where done are not adequate, etc). To my absolute shock, the bank went with the deal at allowed the loan to be based off an appraisal at $200,000.
Steve –
Thanks for this information! We were wondering if we had any recourse on the low appraisal, and it sounds like this is something that we’d be able to follow-up on if this happens again in the future.
I’m hearing a lot of rumbling about low appraisal from a bunch of different people. I’ve only been stung once in the last year and it was for only $2-3K. My realtor was telling me of two yesterday, one of her’s came up $29K short and the other $21K, these were in the prices at $225K and $179K. That is huge. These new guidelines are really bad. Comp’s are suppose to be comparable, but they seem to be lumping everything together. The junk I buy at $40K is in no way the same house after I spend $15-20K. On a positive note, I’m hearing the low end is doing ok with comps so far. I’m crossing my fingers.
What really ticks me off, is in my market, the only real estate that is increasing in value is rehabs and they want to lump a fresh house with a junker that has sat empty and abused for a bunch of years. Talk about further driving the market down……. Common sense has been chucked out the window. Check out what Cap and Trade has in store if you want to sell a house, it is very ugly and might drive me bout of the business, back in to long term rentals, a place I had hoped to never return!
Jingle