VA Appraisal 60k below offer price

[Zoe]

I am glad they gave you a market condition adjustment if supported. I don't understand how they missed the sale real close to the subject and what the differences are between that sale and the subject. The lender and appraiser will look at it on ROV as well as motivations between buyer and seller and many other factors.

 

[Tru Red]

I hope the person asking the original question will update us when the outcome is completed.

I've seen many VA appraisals (as well as every other type) coming in up to $100,000 short around here. Homes start around $1,500,000 in my area. Buyer' are just adding $100K or more to get into contract.

 

[Zoe]

"The appraiser used 3 comps, the most recent from February, the other two from September. Two of them were 1 mile away, one was 2.5 miles away.
The comps that were sent during Tidewater were all from the last 1-3 months, and were 5 miles, 4 miles, and 1 mile. I'm a bit baffled why he didn't include the one that was 1 mile away as it seems similar (at least to me), and definitely supported the price."

This is important. So now we have 3comps (minimum) in report that were considered plus the tidewater comps. There were probably many more that were considered on listings and sales. I can't explain the one sale nearby not being mentioned. If you have 3 comps plus tidewater comps that are similar to the subject, don't hang your hat on one comp.

 

[Mrsmasha]

I hope the person asking the original question will update us when the outcome is completed.

I've seen many VA appraisals (as well as every other type) coming in up to $100,000 short around here. Homes start around $1,500,000 in my area. Buyer' are just adding $100K or more to get into contract.

I will post an update, hopefully it’s resolved by next week. My agent and lender don’t seem too optimistic but agree it’s worth a shot.

Houses in our area aren’t quite at CA madness but are going way above list. We knew we may have an issue with the appraisal but didn’t think it would be such a gap.

 

[Mrsmasha]

"The appraiser used 3 comps, the most recent from February, the other two from September. Two of them were 1 mile away, one was 2.5 miles away.
The comps that were sent during Tidewater were all from the last 1-3 months, and were 5 miles, 4 miles, and 1 mile. I'm a bit baffled why he didn't include the one that was 1 mile away as it seems similar (at least to me), and definitely supported the price."

This is important. So now we have 3comps (minimum) in report that were considered plus the tidewater comps. There were probably many more that were considered on listings and sales. I can't explain the one sale nearby not being mentioned. If you have 3 comps plus tidewater comps that are similar to the subject, don't hang your hat on one comp.

That’s fair, and kind of what our agent suspects as well.

We did notice something that may just be an unfortunate characteristic of the house, but since half of the total sq footage is a finished basement, it looks like we took a big hit when that was priced. Because of how the house is situated it looks and feels more like a first floor of normal living space, not a basement, but was priced very low compared to the main floor of the house.


One more thing I was confused about is the appraiser was not local to the area, I believe he came from about 2 hours away. Not sure if that’s normal for a VA appraiser or not.

 

[Terrel L. Shields]

My lender is telling me that there's essentially nothing we can do now, and

So if the listing price was so much below your offer???? How did the agent set the list price? If it was worth X dollars, then the list price should not be set artificially low. Well, I bet the CMA that the agent should have done use the same comps as the appraiser. Why do you think an appraiser is supposed to pick a number sky high because you "just had to have it" or "I'm tried of being beat out on bids" - When this stupidity all stops a lot of people will be holding houses that won't bring what they paid. You should thank the appraiser for giving you a realistic value or just be willing to burn the X dollars more you want to bring to the table. This musical chairs will stop- sooner or later.

If the sale price is "market value" then there is no reason for an appraisal. "I just paid $5,000,000 for a 1200 SF bungalow but its MARKET VALUE because that's what I paid." Of course, the VA and taxpayers are backing me so I can pretty much walk anytime I want to in the first few years.

Basements are not gross living area - regardless the finish. period.

 

[Zoe]

That’s fair, and kind of what our agent suspects as well.

We did notice something that may just be an unfortunate characteristic of the house, but since half of the total sq footage is a finished basement, it looks like we took a big hit when that was priced. Because of how the house is situated it looks and feels more like a first floor of normal living space, not a basement, but was priced very low compared to the main floor of the house.


One more thing I was confused about is the appraiser was not local to the area, I believe he came from about 2 hours away. Not sure if that’s normal for a VA appraiser or not.

You don't want to get hurt in the buy. You may regret that soon when market changes. Sometimes the best route is run to another house. Rural is very difficult and complex.

 

[Zoe]

Use the 100% VA will give (loan) you and go find another house. On other hand, seller may take $60K less. Get them to pay your closing costs too.

 

[Mrsmasha]

So if the listing price was so much below your offer???? How did the agent set the list price? If it was worth X dollars, then the list price should not be set artificially low. Well, I bet the CMA that the agent should have done use the same comps as the appraiser. Why do you think an appraiser is supposed to pick a number sky high because you "just had to have it" or "I'm tried of being beat out on bids" - When this stupidity all stops a lot of people will be holding houses that won't bring what they paid. You should thank the appraiser for giving you a realistic value or just be willing to burn the X dollars more you want to bring to the table. This musical chairs will stop- sooner or later.

If the sale price is "market value" then there is no reason for an appraisal. "I just paid $5,000,000 for a 1200 SF bungalow but its MARKET VALUE because that's what I paid." Of course, the VA and taxpayers are backing me so I can pretty much walk anytime I want to in the first few years.

Basements are not gross living area - regardless the finish. period.

The only reason the seller went with us was due to him also being a veteran. We were up against 7 offers, at least one of them was cash and higher than our offer, waived appraisal contingency, waived inspection.

It does feel like madness and I’m a first time home buyer and therefore confused as to what the real “value” is. Essentially what we’ve been learning in our search is that in our market we have to be willing to quell a large appraisal gap with cash, if there’s any hope of getting a property. But of course that’s a tough pill to swallow (never mind potentially not financially wise).

 

[Zoe]

The only reason the seller went with us was due to him also being a veteran. We were up against 7 offers, at least one of them was cash and higher than our offer, waived appraisal contingency, waived inspection.

It does feel like madness and I’m a first time home buyer and therefore confused as to what the real “value” is. Essentially what we’ve been learning in our search is that in our market we have to be willing to quell a large appraisal gap with cash, if there’s any hope of getting a property. But of course that’s a tough pill to swallow (never mind potentially not financially wise).

Okay, but you have how many comps saying it is not worth what you are willing to pay? See, that is where I don't want you to get hurt.

Your real estate agent gets their commission regardless of what you pay. The appraiser is protecting you.