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Will an FHA appraiser take the previous sale amount into consideration with avg. % decrease in area?

Will an FHA appraiser base his/her appraisal completely on comps or will he/she look at the % decrease in value in area as well?  I have an appraisal this week and am wondering what I should be prepared for. My accepted offer is 29% lower than the purchase price of the home in 2006.  This is a short sale.  The comps in the area are all over the place because it is in a pocket that is highly desirable but is around the corner from many lower priced homes. 
Will the appraiser look within 1/2 - 1 mile of the property for all comparables?
The list price was VERY low by the listing agent.  He really did not know the value of the area and looked completely at zip comps. So, my offer was very high over the asking price.  The home had 20 offers!!  How do you know if an FHA appraiser is going to understand the value of certain areas in LA? 
Also, this is an FHA loan so want everything to go as smoothly as possible!!
I know that this makes for more issues sometimes...
  • July 05 2009 - Los Angeles
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Answers (2)

By the way, congratulations!  While everyone was trying to steal a "steal", you walked away with the prize.  Your agent deserves a big thank you.
  • July 05 2009
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LOL...Your story serves up a point I often make to clients listing a home - in order to get the highest and best price you need to UNDERPRICE your home.  It is a paradox but the market will alway set the final price, and it is always better to have a feeding frenzy than have a couple of fish looking at your bait.  Maybe the agent new what he was doing after all.

Now to your question, appraisors have quite a bit of training that they go through and are required to analyze the property 3 different ways, comps are jsut one way but are the most accurate for market conditions.  An appraisor will want to base his comps off of closed homes that match the size,room count,and other amenities as close as possible.  He will also want these as NEAR to your home as possible.  This is usually not difficult since people tend to build like homes in hte same areas.  He won't be taking random homes from the same ZIP and trying to adjust them if he wants to stay in business (or licensed).  Mostly they will stay within a half mile but I have seen them expand their search quite a bit in order to get a more recent closing.  I have had excellent luck with most appraisors however as an agent I always have comps that I give to the appraisor if possible.  It speeds his turnaround time and helps insure he has not missed anything.  He will still have to do his homework and verify the comps your agent gives him but your agent and you will know he is working with good data.

A great thing about an FHA appraisal is that it pretty much sets the price for the home, the appraisal will stick to the home like glue.  That is why FHA appraisors have to be good at their job, once they set the price it is very hard to change it.  If his appraisal is lower that your price you should renegotiate.  If he is higher then you just made out.

Hope this helped.
  • July 05 2009
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