Really Low Appraisal, Help!

[Salsa]

I have someone willing to purchase my home for 160k in Charlotte NC. We just had the appraisal completed and it came back at 120k! The house is 2 bed 1 bath so I know that hurts but we have completely updated the kitchen and upgraded the bathroom. The comps used are 150k, 107k, and 125k. all of these homes are original kitchen and bathrooms. My question is he rated them all C3 but since we have updated ours should he not put the comps at C4 since they are not updated at all? He also did not account or the large front porch (bungalow home) and we have a large back deck also that he did not add in. They only + he added to the comps was 1k for our fence and 10k for heating and cooling on one of the homes. All the others was deductions for SF and another deduction for a garage for 5k bringing ours in way less that is updated and much better shape than the others. This just does not seem right to myself as well as the buyer.

 

[KHS445]

Obviously not being familiar with your house, neighborhood, etc. and not having looked at the report it is tough for any of us to provide you with specific answers. That said do you have any documented/confirmed information on any sales of more similar homes within your neighborhood that have sold in the last six months? Not to make judgment on your appraisal but the comparables used may have been the best available. As far as rating C3 or C4 that is specific to the particular house and not how it compares to yours. In other words, at least in the short-term, your appraiser will rate those homes the same in all of his/her reports, Believe me the more similar the properties the easier our job is, so that vast majority of us make every effort to find the most similar properties we can.

Who was the appraisal prepared for? If it was a lender or other third party any questions regarding the appraisal would have to be submitted to the appraiser thru them. My recommendation would be to review the complete report to make sure all of the factual information is correct, then write down any questions you have and combine that with any information you find regarding what you feel are more relevant sales. Give this information to the person listed in the report as being the client and ask them to forward it on to the appraiser for comment and/or reconsideration.

I am fairly certain others will chime in, but good luck to you and please keep us informed.

 

[chad hampton]

I'd be curious if your home was listed through the MLS? If so, what has your agent said about the pricing?

2 bedroom's are tricky. Lenders want to see 2 bedroom comps. No way around that. I never appraiser a 2bedroom home w/o having at least one 2 bedroom comps. Saves a lot of time when the lender doesn't have to come back asking for one.

 

[Salsa]

Obviously not being familiar with your house, neighborhood, etc. and not having looked at the report it is tough for any of us to provide you with specific answers. That said do you have any documented/confirmed information on any sales of more similar homes within your neighborhood that have sold in the last six months? Not to make judgment on your appraisal but the comparables used may have been the best available. As far as rating C3 or C4 that is specific to the particular house and not how it compares to yours. In other words, at least in the short-term, your appraiser will rate those homes the same in all of his/her reports, Believe me the more similar the properties the easier our job is, so that vast majority of us make every effort to find the most similar properties we can.

Who was the appraisal prepared for? If it was a lender or other third party any questions regarding the appraisal would have to be submitted to the appraiser thru them. My recommendation would be to review the complete report to make sure all of the factual information is correct, then write down any questions you have and combine that with any information you find regarding what you feel are more relevant sales. Give this information to the person listed in the report as being the client and ask them to forward it on to the appraiser for comment and/or reconsideration.

I am fairly certain others will chime in, but good luck to you and please keep us informed.

 

[Salsa]

Thanks for the information! Not sure if I could post the comps on here but my house is not MLS listed. Not having many comps is part of the problem for sure but there are a few that I have seen and surprised he did not pick them. Do appraisers take into account for remodel as the comps had all original bath and kitchens in them?

 

[bnmappraisal]

Do appraisers take into account for remodel as the comps had all original bath and kitchens in them?

Generally speaking, yes, we do

I will add (nothing personal toward you) that sometimes the subject's "remodel" isn't that different than the "comps"
That being said, as KHS says ...

Obviously not being familiar with your house, neighborhood, etc. and not having looked at the report it is tough for any of us to provide you with specific answers.

 

[bnmappraisal]

The comps used are 150k, 107k, and 125k

I will add, that's a pretty wide spread for sale prices. You mention Charlotte - a decent sized city. If you're within the city, I would think an appraiser would be able to find more similar "comps" (maybe not?)

 

[chad hampton]

I'm not sure what part of charlotte you are in, but yes - I always try to match renovated comps to a renovated subject. I assume you have an older home in an older neighborhood in which some homes are updated and some aren't?

In that price range (under 200k), you have to be careful how much you put into a renovation. If you buy a home for 100k and you put 50k into it, it doesn't make it worth 150k. Not saying that's what you did, but it might be over-improved for the area? but 120k and 160k is a big difference. When you're that far off, something's up.

There really isn't much anyone here can say without more info. And even if you gave us that info, I'm not sure anything we say will be of much help. It's really between the buyer and their lender.

 

[NachoPerito]

A contract for $160k and an appraisal that comes in at $120k! wow! quite the difference.

 

[NachoPerito]

Finding glaring errors may help your cause
Finding far better comps may help your cause
Proving that you have a home that is far more remodeled than the others and no adjustment was made can help your cause (especially a kitchen)

The porch and deck specifically are not as persuasive typically