Help! VA Appraisal came in $40K less

[Zoe]

Call VA regional loan center tomorrow. They will explain it to you.

 

[Zoe]

Just pay cash. Forget VA or any financing.. Some of that is fixin to haunt too. Institutional investors are going crazy. Many are foreign investors.

Don't worry about VA or any lender. Just pay cash.

 

[Tru Red]

I've had all day to think about this. Watched F-1. Watched IndyCar. Watching Nascar now. Helps me to focus and make sense of the world.

I have come to the conclusion the Buyer (original thread starter) is right. The Buyer should get the loan for any amount they want. At some point in the future the $40K deficit will be made up. History tells us it will.

All appraisers should just stop. We are no longer needed and clearly not wanted. Disliked by most, hated by many.

A Buyer wants a house? Just point, sign your name and move in.

Cheers.

BTW I have two set's of local friends in California that own homes in The Villages south of where the original author is. It is a "hot" market right now but like any area, will eventually slow.

 

[KYLECODY]

I agree. My credit scores are 785 and if I had 20% to put down I would definitely go get a conventional loan hands down.

But here's the thing. I'm searching all over my home Zip Code of 34476 and looking at all sales for 3/2 b/w 1500-1750 sqft. You have to go back to July to find anything selling for near $137 a square foot and it was old without a garage. Everything that's sold or listed since August has been at least $150 to as high as $185. It's not a one-off like there are no houses to find similarly priced.

1700 sqft homes have been going for $160/sqft for the past few months. The crappy thing I'm facing is if this deal falls through and I get my earnest money back, why even bother going to Adams or DR Horton in Brookhaven/Greystone Hills where they are actively selling for $175/sqft for 3/2 1700sqft if the appraisals are still going to lowball? I feel I'm being unfairly shut out of this market. Now I understand why sellers don't want to take VA bids.

And all this "the VA is just looking out for people", give me a break. If by some miracle I can still close on this house, my mortgage payment would be around $1550. But if I have to go potentially look for rentals, the 2br/2ba apartments in the good areas close to work start at $1800. Rental Houses? Meh, if you can find them in Marion County, maybe $1800, but in Alachua County 1300sqft goes for well over $2K. So yeah, I'm being protected into having to throw away higher monthly amounts on rent instead of being able to buy a home that the market says is $280K, but some appraiser who lives in the dark ages thinks none of the area homes appreciated in value since December 2020.

By the way talking about "psf" means nothing. Thats a realtors "tool" they throw around to try and sound smart. It means nothing unless you are comparing extremely similar sized homes with the exact same location, amenities, upgrades, etc. Three identical, builder, model matches in the same subdivision..A basic one may sell at $400k(200 psf) while a completely, recently updated one may sell at $450k, 225 psf, while a nice one with a pool and spa may go for $480k, 240 psf. Three model matches from the same builder selling at 200 psf, 225psf and 240 psf..

Or try this one. If psf meant anything we could say homes in the Alligator Hills subdivision goes at $150 psf. That would mean a 1500 sf home would sell for 225k. So using that, a 3000 sf home should sell for double right? $450k...It never works like that. A 3000 sf in that price range with the 1500 sfer selling at 225k would most likely go for around $300k..Now that throws psf out the window doesn't it?

 

[Jayjay25]

Here’s some interesting points from this thread. The original poster just sold there home at the high end of the market yet has no down payment (however stated they were good at saving money). The builder just raised his pricing by 40k and this one came in 40k short. Comparable homes were selling 20% lower 1 year ago.

Might I add that using price per square foot to determine housing value is like trying to use price per pound when shopping for a car .

 

[Salty]

In my area, price per sq ft is meaningless in residential appraisal. It is not even considered. Especially now with insane pricing for materials. I focus on location first then move on to size, condition etc... My last several appraisals of purchases did not even come close to meeting contract price (despite being told there many offers above contract price) as there simply were no truly comparable sales to justify the price. I have also recently declined many due the the contract price being out of the universe of possibility (just not worth the headache that will inevitably follow). Also 1 sale does not make the market. I appraise for most probable price, not highest price. Have to also understand price -vs- value. In that price range, I have a hard time believing the VA appraiser was negligent. I will say; however, that when I come in lower then contact price, I explain ad nauseum why and even list some sales that some might think support the price and explain why I did not use them. Most of the time is is a locational issue. For example a home in a development might appear to support the price, but historical data shoes that homes there always sell for 20% higher. Or I have had agents give me "comps" from other school districts completely overlooking the ones in close proximity. Anyway, this can easily be dealt with when the appraiser responds to why any other potential comparable sales were not used.

 

[Tru Red]

Here’s some interesting points from this thread. The original poster just sold there home at the high end of the market yet has no down payment (however stated they were good at saving money). The builder just raised his pricing by 40k and this one came in 40k short. Comparable homes were selling 20% lower 1 year ago.

Might I add that using price per square foot to determine housing value is like trying to use price per pound when shopping for a car .

I noticed those points as well. Sold their house last year and doesn't have the $40K to put down. Price per square foot is effectively meaningless as it includes the land value.

However pointing those out..........doesn't matter. Just COMPLY Mr/Ms Appraiser. It's your fault.

SMH

 

[Tru Red]

was certain from Zillow recent sales, pendings, and current listings, the contract price was more than fair.

I TOTALLY missed this until I read the post again.

He/she is relying on Zillow?

SMH. This entire post is mute.

 

[glenn walker]

Hey many people are caught in a similar trap right now I just old my deceased fathers home for $800,000 and had one VA offers at full price but did not accept it because I know it won't appraise at $800,000 and the buyer does not have the cash to gap it up. I dont like doing that as he was a WW-11 vet and a 35 year career Navel Weapons but as the executor its my duty to get the highest and best price possible. I had 6 all cash offers within 10 days and frankly I doubt the VA buyer will find anything in the area they want to live in.

 

[KenAZ]

I am always amazed when a buyer wants to spend $40k more than what a home is worth. I would love to see the builder sales of similar size homes. I bet that they are all about $4ok below the sales price.

The appraiser did you a favor. Others are paying $40k over due to emotions and anxiety. Appraiser are valuating the actual home and not including emotional bids way over the actual worth of the home