Low Appraisal, Items Not Counted, And A Deal Lost

[egmr]

Appraiser by day, psychic by night.



In MY MARKET (not Ohio), installing granite in a sub $100k home is an over improvement.

There is a vigorous market in granite here making it very affordable for folks in sub 100K homes. A lot of competition.
I am very well versed in granite and tile in my area. I am not asking for extra credit for the stone.

 

[egmr]

I'd recommend speaking to your attorney regarding the ramifications of the buyer not being able to obtain financing. It should be spelled out in your contract.



It wouldn't. The appraisal was performed for a particular client. It has nothing to do with any other client.



Speak to your attorney.

They were pre-approved and all was in order. Until the low appraisal. I am told FHA will not loan more than the appraisal amount.

 

[Meandering]

How do I go about checking the FHA case number with FHA? Is this something that can be done online or do I need to call them? Thanks!!

Call a mortgage broker and have them check for you online. they have the ability to do that.

 

[The Warrior Monk]

I am being told that any future buyer, whether FHA, VA or conventional will see the current case number and appraisal.

This is why I recommend speaking to your attorney; FHA, VA, and conventional loans are entirely different loans.

I am being told this will hurt (red flag) any future purchase for about 4 months. I guess my question is this: How will this appraisal affect a future sale if an appraisal has to be done.

i can't speak for FHA, since I don't do work for them. But if a potential buyer does not go the FHA route, it's a non-issue.

 

[Denita Neuenhaus]

Actually your agent is correct, once the FHA case number is assigned and an FHA appraisal completed and turned over to the lender the appraisal value stays with the property, not the buyer, for 4 months. This is referred to as the validity period. See HUD Mortgagee Letter 2009-30 effective January 1, 2010. It used to be a six month period but was reduced to 4 months with that mortgagee letter. Go to HUD.gov to see all mortgagee letters if you are interested.

Having said the above, it does not affect VA nor conventional loans. Only FHA mortgages. What we do here in that circumstance is market the property for a buyer that can qualify for any other type of mortgage but an FHA mortgage.

EDIT: Naturally there is another solution: you can drop your contract price to the appraised value or the buyer can bring in cash over the appraised value to meet the contract price or both you and the buyer can negotiate something in between.

 

[bnmappraisal]

This is why I recommend speaking to your attorney; FHA, VA, and conventional loans are entirely different loans.



i can't speak for FHA, since I don't do work for them. But if a potential buyer does not go the FHA route, it's a non-issue.

Actually your agent is correct, once the FHA case number is assigned and an FHA appraisal completed and turned over to the lender the appraisal value stays with the property, not the buyer, for 4 months. This is referred to as the validity period. See HUD Mortgagee Letter 2009-30 effective January 1, 2010. It used to be a six month period but was reduced to 4 months with that mortgagee letter. Go to HUD.gov to see all mortgagee letters if you are interested.

Having said the above, it does not affect VA nor conventional loans. Only FHA mortgages. What we do here in that circumstance is market the property for a buyer that can qualify for any other type of mortgage but an FHA mortgage.

agree with both. Good luck

 

[JTip]

We purchased for 28000.

So how much money did you put into this flip? Let's crunch some numbers....

 

[Meandering]

We had a contract for $71,700

We purchased for 28000.
4/13 bank takes possession for 57771
6/05 last "real" sale for 86,300.

You've owned it less than 90 days?

 

[JTip]

62k (appraised value) - 28K (purchase price) = $34,000

1,200 sf remodel on a $50-$80k house costs......well a slab of granite costs a couple grand right off the bat....

How much profit are you looking to squeeze from the flip? Making five digits on flips only happens on HGTV these days.

 

[chad hampton]

Appraisals are good for 1 day, the effective date. If the FHA won't accept another appraisal for 120 days, your issue is with them, not the appraiser. He/she didn't make the FHA rules.

And like others have said, you are the seller, the appraisal was performed for the buyer's bank. Not for you or the buyer.

VA would hire their own VA appraiser, they would not even accept an appraisal from someone not on their panel.

2 bedroom homes are always an issue to get through bank underwriting. Every lender I have ever worked for requires, at a minimum, 1 comp to be a 2 bedrooms sale. They don't care how far you have to go, but you better have 1 in your report and explain it. I've never heard of a case in which a 2bedroom home was compared to all 3 bedrooms homes and have the appraisal be approved.

In most areas of the country, appraisers work in multiple counties. I cover 6 counties in NC. If you found an appraiser that lives in your county, you probably can't expect someone much closer. We are not realtors who only specialize in 4-5 neighborhoods.

I do wish you luck in resolving this issue. Appraisals are just opinions. I've never agreed with not being able to get another one. I would expect 2 appraisals to be somewhat similar, but not exactly the same number.