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PS:
Also, the house is less than 3 miles from Sacramento State University.
With its current location, the house should have been appraised more!
Ingrid
J- It seems that you may just feel the house is worth more than it actually is. Appraisers go by what the market is telling them- so for some reason two different appraisers came to approximately the same conclusion- not surprising that two appraisers were 10k off... Crazy times, and market conditions may not be all that great. there may have been a short sale in the neighborhood that brought values down, there may have been a divorce 'fire-sale' that brought values down- whatever it was- was.... so, roll with it, and if you love the house, don't second guess it over a poor appraisal.
ALSO- you need a value of 250k, and it looks like you got it... so are you just wondering if you are getting a good deal or not? :)
If one of the appraisers gives you a value of $250 k, is that not sufficient for getting the mortgage loan?
What advantages are there to you to have it appraised higher at this time (i.e. why do you wish to challenge the appraisers' assessments)?
The lender's ordered appraisal was $240,000. Your second appraisal was for $250,000.
The seller wants $250,000 for the house.
Not knowing your financing plan or how much down payment and cash available you have...this is still the time you should try to negotiate with the seller. Obviously, the sale is contingent on financing.
Neither appraisal done is exact. There's even a "value range" with a certified/licensed appraisal before they pin-point a value. It's just an opinion...an educated guess. Of course, the bank is going to agree with the lower one they ordered and the homeowner is nodding her head at the second one....but the truth is her house is worth $240,000 and also $250,000. Can she meet in the middle? Say $245,000 and you come up with $5000 extra cash that your bank won't cover.
This is where you can renegotiate or walk away. She might not want you to walk away...and she might decide to accept a $240,000 sales price. Truthfully, if she was on the market for another 30 days or more, she may not get another buyer who'd be even willing to pay $240,000 let alone $250,000. I hope she's not too stubborn and hard-nosed. It's nice working with people who you can work with. Try to be objective.
Stick to the agreed price. Why give away $10K?
Sacramento has been designated by every financial institution as a "heavily declining area" and thus they have told appraisers to make sure to take this into account. I agree with 80's above, walk away and let the house sit on market for another 30-60 days. Then re-visit and ask lower around 230K
Regards
If you REALLY wasnt the house ask the owner to hold a note for the additional 10k.
.
Most times with two appraisals the lender will average the two. What I want to know is who picked the second appraiser? It sounds to me like you love the house, I would go back to the seller and say that your lender is basing your loan amount based on the average of the two appraisals. You feel that $10,000 should be knocked off but maybe they would be willing to split the difference. They may be more agreeable to that.
There are a lot of possibilities with this...it sounds like you are leaning toward going ahead so try to see if they will bend a little.
The Seller is not willing to negotiate and sticking to their price of $250K.
The Seller is not willing to negotiate and sticking to their price of $250K. The house is not bank owned nor REO. Its owned by a long time owner and the house itself is very well kept . If I am going to compare it with the houses built in the last 5 years, this 63 yr old house is a stand-out. Most bank-owned/REO houses are trashed and built of low quality wood. I am really puzzled why the Appraisal's assessment was way below the market. I do agree that houses in Sacramento is designated as heavily declining area but not all part of Sacramento. Areas closer to downtown/midtown have been stable. In fact, most houses for sale are priced above the market value. There were an article in Sac Business Journal December 2007 and March 2008 that properties closer to downtown/midtown are priced higher due to rising cost of fuel and that commuters no longer want to put up with long hours in the traffic. This is the reason why I am puzzled with the Appraisal's below the market value assessment. If the appraisers did the appraisal correctly, I would not have to pay for another appraisal. Also, I measured the house myself using the best laser technology out there , both Appraiser measured were short of more than 50 sq ft from the total square footage as per the county record. As per my own measurement, the county total sq ft was correct. Do licensed appraisers know how to measure? Do Appraisers know and have access to the data of the most recent house sold out there? In my observation, most appraisers take on job orders they could not perform. The result is low quality appraisal and both buyer and seller suffer. Most of all, these appraisers are not good in research which could lead to using old comps (as what happened to my appraisal). Lastly, Appraiser treat buyers like idiots, just because they are licensed, but after reviewing both appraisal report, hey I proved it to myself that both does not know what they are doing.
jine, You really like the house. Buy it and be happy.
Those 50 sq. ft are meaningless . If it were 500 sq. ft. more, then the story is different. Appraisers do not measure square footage of a house. They just take the county record as a fact. For what they do, we can do it ourselves with the Internet. They can't really compare if a house sold for x with unpermitted upgrades done by a licensed contractor. It is just a general condition of your home compared to a foggy picture as in bubble time versus now. Banks did not care then but they do now.
... and, it's free and anonymous
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Appraisal below Seller's Price
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jinelson0704
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Hi
I need some of your 2 cents.
I tried to purchase a home with the price of $250K. The lender ordered an appraisal at our own expense and it came down to $240k (i.e. 10K below Seller's price). Zillow's home value ranged from $243,455 - $363,515. I really liked the house, built in 1945 and still in immaculate condition inside with minor wear and tear outside, new HVAC and newer roof. There are no problems in the inspection report.
The trouble is the Seller is not willing to sell the house based on the $240K appraised value so we ordered second appraisal. The 2nd appraisal assessment was $250K, enough to cover the Seller's asking price.
Here's the situation, the house has never been resold in the last 60 years. In the area, most houses have not been resold for like 15-20 years. The neighborhood is well established, have access to all types of public transportationand closer to downtown Sacramento, CA. I checked all the comparable homes in Zillow and other websites that offer free home values, the comps recently been sold in the area within 2 mile radius have a higher rate per square footage than what both Appraiser's assessment to the house that I want. The two appraisers used old sale comps and homes that were sold low in value.
No doubt the house that I want were appraised by both Appraiser's unfairly which resulted in grossly undervalued the house below for what it is curretly worth. I just want the house to be appraised fairly.
Is there any way to dispute the two Appraiser's final assessed value?
I would appreciate getting your opinion.
Ingrid
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