Appraised Value is TOO HIGH!

[Mile High Trout]

hopefully I ran into a lone wolf agent...

Not unless that was the only commission based sales person out there.

(MHT just posted. Interesting thought on the agent not only getting confused but perhaps failing to do her duty as a buyer's agent. I wouldn't want to be a part of that argument!)

Thank you. I've enjoyed reading your longer posts, and have been continually learning from you.

It just seems like the easiest way out. Dump it back on the Realtor and tell that person to do their duty and find a way to make it work.

Anecdotally, you can talk to just about anyone about similar scenarios and how people made it or broke it. That's free and easy consultation and can stop a lot of problems from being ongoing. Although outside of the proper customer handling channel, you won't find a mortgage banker in this country that would complain to the state about you providing advisement regarding alternative approach which salvaged their deal in the works there. Tell someone to reach deep into their pockets, because that's what it's going to take on this one.

Don't worry about net exposure with this site. They've mainly shut that down and threads get archived with amazing quickness. The climate has changed here over the years. searching is not the same, internet bots don't work the same, and the archiving makes reading older stuff less effective because it's difficult to find, and a lot less fun. At least I think that's what's going on. Who knows.

Appraised value is simply stated as collateral lending worth. So it's that simple. You appraised objectively based on known verifiable market data. They can take the home or leave it. It's their purchase, not yours. Recognize that it is personal, but remain professional by being strictly factual and providing anecdotal helpful information when pressured.

 

[J Grant]

Making it clear that buyers/sellers shouldn't rely upon appraisals for their pricing decisions

When buyers/sellers use financing to purchase or sell a home, they are relying on appraisals for their pricing decisions. (since price affects LTV amount)

This appraiser does "set" the sale price in a financed home, by providing a MVO, and that is true whether MVO is below, matches, or exceeds a SC price. (when the MVO exceeds a SC price, $ amount for loan LTV is the SC price)

Our value opinions do "set the price" in financed homes. That is the reality.

 

[Cornelius]

Send them this gif

I love it.

 

[Cornelius]

"The buyer's agent calls me direct and on the verge of tears, she says I appraised the home too high. Her clients were counting on me to "come in lower" and then renegotiate with Fannie. "

Remember who hired you and the intended use of the report. I am certain it was not the buyer and it was not to negotiate a lower sale price.

 

[Mile High Trout]

JGrant, it's semantics, but I disagree.

The appraisal sets the lendable collateral worth for a property.

The only relationship that has to sales price is when the buyers don't have cash contribution.

Buyers and sellers can strike any deal they want. That's always valid. Where the appraiser comes in is lendable collateral worth. If they buyer wants to pay more or less, and the seller is o.k. with that, the appraisal has nothing to do with it, except for indicating market constants which is where lenders lend and lenders stop lending.

A lender is fine and dandy lending a 1m on a 2m purchase, so long as the buyer comes with 1m cash down, in this predominantly 1m marketplace. That's the deal. I know, it's a pointless argument because you already know this. But the semantics are important for more clear understanding of the process. The tangled web we weave, protects us, in this example.

 

[J Grant]

Yup, agree with ya Mile High! Sometimes the amount of LTV value does impact sales price or becomes the sales price when parties re negotiate contracts to match the MVO, which as you noted, the lenders base their LTV decision on. The buyer can pay whatever they want above that amount.

We don't tell the buyers/seller what THEIR sales price will be, we tell the lender what OUR market value opinion is. The lender bases their LTV and lending decision on the MVO (and other information in the report). The fact that a lender denies a loan when an appraised MVO is below SC price is a lender decision...though everyone dumps on the appraiser for "killing the deal".

When the parties renogotiate the SC price to match the MVO, the appraised value does become the sale price, though that was not the original purpose of the report.

 

[mark hurlock]

When the parties renogotiate the SC price to match the MVO, the appraised value does become the sale price, though that was not the original purpose of the report.

I agree. There is no reasonable argument that a buyer can not base their contract on a subsequent event. The fact that the subsequent event is the appraised value is irrelevant.

The appraiser did not establish the renogotiated price, the buyer and seller did.

 

[Terrel L. Shields]

Folks who make offers higher than they think it is worth, deserve all the grief it gets... Think about it...remember all those Realtors complaining that they have "multiple" offers....Just another example why such "multiple offers" should be viewed with suspecion...Sure...just outbid the other guy and get them out of the picture then renegoiate lower... toughskis

 

[J Grant]

Appraisers who partially base a high value on the fact that there were multiple offers also get to share the grief if things go south. I would imagine that many a "winner" in multiple bid deals wakes up with buyer remorse.

Appraisers need to consider all the elements of the MV def when evaluating a SC price...was the buyer acting prudently and in their own best interest? If over paying for a home and making rushed decisions under pressure to beat another bidder is acting prudently, then what is imprudent buyer behaviour?

That said, the buyer made their decision and should not "blame" the appraiser for a high value, assuming the value is credible and supported by predominate market data beyond the SC itself.