Really Low Appraisal, Help!

[Bob Ipock]

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.

So this is a FISBO? How do you know what your home is worth? Most people think their home is worth more than it is. You are biased as would be most people on their own home.

This is an issue for the BUYER to deal with. He needs to contact the lender and find out what the process is to appeal.

 

[Bob Ipock]

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.

So this is a FISBO? How do you know what your home is worth? Most people think their home is worth more than it is. You are biased as would be most people on their own home.

This is an issue for the BUYER to deal with. He needs to contact the lender and find out what the process is to appeal.

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?)

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?)

Exactly why would you think that? You have assumed something that is not true to be true. Small homes like this are being bulldozed by the dozens in order to build new homes. It is VERY difficult to find 2 bedroom comps. @ $120,000-$180,000. In may places in Charlotte would be a teardown.

 

[Artemis Fowl]

As assessor, I see most transfers that take place in my community. I also answer (or attempt to) many questions related to transactions...mostly after they have been completed.

This is a totally non-scientific observation specific to my area: A significant percentage of FSBO and Land Contract type sales have issues with value and transfer-related documents. Most of these participants cite a desire to avoid fees and commissions for agents and it ends up costing more in stress and money when problems eventually arise. Having an industry professional involved greatly reduces the chance of a problem. For some deals that sail thru with no issues, it can seem like a waste of money...for those that don't, that commission or fee can fall far short. There is always the risk of interacting with a professional idiot (they're everywhere) but a little research and some references can mitigate that risk.

Did you do your own valuation based on your own research and opinion of your property's ranking within the market? Did you consult with anybody prior to setting your list price?

I don't ask because I disrespect your effort and research. I am sure it was thorough and well intended but sometimes we don't even know what we don't know. It takes years of market observation for a licensed professional to be considered competent.* An independent third party opinion can be very valuable when entering into a transaction as complicated as real estate can be. So far I only see a single professional mentioned in the thread...and his/her opinion differs greatly from yours.



*Forumites can argue that all you want...nothing substitutes for hours doing the job and feedback from peers.

 

[bnmappraisal]

Exactly why would you think that? You have assumed something that is not true to be true. Small homes like this are being bulldozed by the dozens in order to build new homes. It is VERY difficult to find 2 bedroom comps. @ $120,000-$180,000. In may places in Charlotte would be a teardown.

I don't know Charlotte. I've never been there. I obviously know the "name" as its a pretty decent sized city in the US (just like I've heard of St Louis, or Louisville, or Reno, but have never been to those cities either)

The OP didn't say exactly where their house was located (in the city or "the Charlotte area") which is fine. So I was making an assumption.

 

[Mr Rex]

I'm not in Charlotte either but am in NC. 2 BR 1 bath @ $193k in Raleigh or Charlotte is prolly in tear down and rebuild territory as far as I can see. Mr Ipock and Carnivore are there in the area and have kinda echoed that (at least Mr Ipock did). As Mr I said, most folks think their property is worth more than it is and by and large buyers are not concerned with market value but what they can qualify for with the artificially low rates created by governmental interference with the market to mask a **** poor government model. Thank God for a new more realistic model, but God help us get through to the other side of reality (realty?)

 

[Mike Kennedy]

Charlotte, NC 2-Bedroom Homes for Sale - realtor.com®
https://www.realtor.com › North Carolina › Mecklenburg County › Charlotte
"There are currently 512 2-bedroom homes for sale in Charlotte, NC. Browse realtor.com® and contact an agent to schedule a tour."

Recommend contacting the agents with the most similar active properties and inquire about recent closed 2BR sales they used to establish listing prices on the actives. Also scan thru the listings and identify the more prolific agents offerings - contact THEM first.

 

[Carnivore]

Charlotte, NC 2-Bedroom Homes for Sale - realtor.com®
https://www.realtor.com › North Carolina › Mecklenburg County › Charlotte
"There are currently 512 2-bedroom homes for sale in Charlotte, NC. Browse realtor.com® and contact an agent to schedule a tour."

Recommend contacting the agents with the most similar active properties and inquire about recent closed 2BR sales they used to establish listing prices on the actives. Also scan thru the listings and identify the more prolific agents offerings - contact THEM first.

Mile my MLS says there are 148 2 bedroom homes currently offered in Mecklenburg County, City of Charlotte almost covers the whole county land area.
There are also 541 Condo's for sale in the same area.
There have been 566 two bedroom homes sale in the prior twelve months.
There have been 2,437 two bedroom condo sold in the prior twelve months.

If I segregate just to Charlotte City the 2 Bedroom SFR drops to 478
the two bedroom condo number stays the same 2,437.

The significant data over the same time period is over 5,000+ homes with three bedrooms have sold The MLS stops at 5,000 so there could be a considerable number more..I have to do some ranging of price to get exact number.

So my point along with USPAP Compliant is that two bedroom just are not very popular. USPAP Compliant is correct once a two bedroom gets up there it really is just site value in many cases. Especially the closer you get to center City. I-277 Inner Loop(uptown Charlotte)

So we have had only eighty one(81) 2 bedroom homes sell in the last twelve months in a price range of $125k-$175k
28 sold from $175-$200

Here is the most important point. The 125-175 range was exactly where I thought they would be. that's near uptown and along the light rail route coming in from Concord to the north east. The area(NODA) has an attraction to a certain lifestyle -and also millennial. This is along The Plaza

I could go on and on...but bottom line is 2 bedroom are not popular, except in Condo's

 

[Mike Kennedy]

"So we have had only eighty one(81) 2 bedroom homes sell in the last twelve months in a price range of $125k-$175k
28 sold from $175-$200"

THAR YA GO . the Pool from which the OP can draw the most proximate, similar and directly competitive (under 1,000sf GLA). Any of the 2 groups above in close proximity?

OP - "It's hard to find a 2BR single-level home smaller than 954SF."

 

[Carnivore]

I grab this list of 2 BR sales that are in the area that runs along Plaza-Midwood, NODA, etc This is all near the light rail line. I purged some(5 sale) real low sales due to flood zone, some teardowns, etc Stupid Realtor listings. They don't have a clue on what they were selling, or they absolutely knew and sold it to a buddy. One of them was located totally in a Flood Zone..It was a dump and sold for site value only.

The CMA is of 2 BR in an Area of NW Charlotte Near Uptown. I am working on a REO four bedroom in this area right now.

Interesting to note is there are New homes all around in this market segment that are very expensive.

 

[TRESinc]

Thank you for your help! I took the advice and sent some comps I thought was a better fit than what the appraiser chose and sent to the buyer for the lender.

this illustrates one of the most confusing things i encounter as an appraiser. the borrower wants to by a house, applies for a loan, appraisal tells the borrower they are paying too much and what does the borrower do? they let the side who is selling tell them they should be spending (potentially) more than the house is worth. that baffles me every time. how in the world can someone let a party who is not their advocate advocate for them?