How bad will comps affect my appraisal/sale?

Recently 2 townhouses like mine sold for $195k (asking price-$200k) & 182k (asking price-$200, changed to $194k). We are asking $209K. If we were to receive an offer for $203-205K (our bottom line due to what we owe), how likely is it the appraisal go through and we would get $203-205?

We are waiting for one more closing. Our realtor said if it closes at $200k or lower (they were asking 209,900) we should take our house off the market until spring. Currently, we are the only townhouse for sale in the subdivision. Do you agree with our realtor?
  • July 14 2014 - Lombard
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Answers (8)

Remember comps are critical but appraisers make adjustments for condition, improvements, etc... Consider possible appraisal after adjustments, where your market is heading carefully and national economic, interest rate predictions and trends before taking property off the market
  • July 16 2014
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Hi, don't give up yet, because your complex units are not the only comps the appraiser is going to look at. May be there are similar comps in the radius they will be looking at that sold for a higher price. Also, if your unit has been updated or has nice features, your agent needs to bring that to the appraiser's attention.
And finally, since the difference is not that huge, you can make it a condition of the sale and agree with the buyer before getting into escrow that in case there is a discrepancy between the purchase price and the appraised value, the buyer would pay for the difference. Just make sure in advance that the buyer has the financial capacity to do so should this become a necessity in the middle of the process. Good luck.
  • July 16 2014
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One question that I would look at would be does your agent feel he/she could justify the difference in value to an appraiser? Do you have improvements or a location premium that could help increase the appraised value? Have you added improvements that the other units did not have, such as granite, a finished basement, or other improvements no typical in the community that could help your agent justify the higher sales price to a buyer and an appraiser?
This is the first place I would start. Take a hard look and be honest with yourself. The answer is there.
  • July 16 2014
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I do not agree. The differential is not that great if all other things are equal......and sometimes they are not. The 3 sold comps the appraiser uses need to 'average' within 10% of each other so you might be ok. If some of those comps are more than 6mo old the appraiser usually goes beyond the standard radius to find other comps so that might help. It is hard to know for sure, but why take the property off the market. Just wait and see what happens.
  • July 14 2014
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If the buyers are putting enough down payment the lower appraised value might not be a problem as long as the buyers do not make their offer contingent on the appraisal. Hope this helps.
  • July 14 2014
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Profile picture for valuatemyhouse
Great Question!  Unique situation but dont quit just yet!  You are only 20k off!  Also you dont know what the buyer may have in regards to financing.  Keep it on the market for 60 days without dropping!  If you see a decline than yes throw in the towel if you are set on receiving the 209.  If you are ok with going lower than set your bottomline and stick with it.   Markets fluctuate up and down.  Has your realtor taken you on a tour of the comps in your area?  Does your home have unique items that these properties do not?  If you bought your property and upgraded and updated everything within the last five years and the comps around did nothing than the appraiser may see this and justify the higher value. 

My suggestion stick it out, go visit the other properties pending or active in your neighborhood and see if your property compares better or similar value.  After you have seen these with your eyes than make the determination dont just see numbers on a piece of paper than quit!

WIN! 

Best of Luck keep me updated if you get the $209K
  • July 14 2014
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I also agree with your agent - with no comps near your price you would be hard-pressed to get the appraisal value unless you have some upgrades the others clearly didn't have.
  • July 14 2014
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Profile picture for wetdawgs
I agree with your agent.  If there are three closings < $200, the chances are very good that you will not be able to sell for $203 to 205 unless there is something very spectacular about your home.

  • July 14 2014
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